Revenue came in at 135.5 billion yuan (R321 billion) for the three months ended March, versus the 141.1 billion yuan average forecast. Growth decelerated for a seventh straight quarter, to the slowest pace since the Shenzhen company went public in 2004. Net income slid 51% to 23.4 billion yuan, compared with the 29.3 billion yuan projected.China’s largest tech corporations from Tencent to Alibaba Group Holding Ltd. are resigning themselves to a new era of cautious expansion, more than a year after the start of Beijing’s campaign that eventually engulfed every internet sphere from e-commerce to gaming and fintech. Sentiment toward the industry has swung wildly in recent weeks, as investors debate whether the crackdown has run its course, or is at least switching to a more sustainable pace.”2022 could mark Tencent’s second straight year of low single-digit EPS gains, putting its status as a China growth stock into question,” say Marvin Chen and Sufianti Sufianti of Bloomberg Intelligence.
“Yet, the second half and 2023 may yet draw flames from Tencent’s glowing growth embers, particularly if consumer demand stabilizes, regulatory tightening eases, and gaming approvals resume.”Prosus, which owns 29% of Tencent, fell 1.6%, while Naspers was down 2% by Wednesday mid-morning.
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