Shares within the Chinese language social media and gaming large tumbled round 6% in Hong Kong on Thursday after its US-listed shares closed 5.4% decrease on Wall Avenue.
The inventory plunge got here after Tencent (TCEHY) reported income of 144.2 billion yuan ($22.6 billion) for the fourth quarter of 2021, up 8% from a 12 months earlier. That is the slowest income progress for the reason that firm listed on the Hong Kong Inventory Trade in 2004.
Tencent’s annual income for 2021 was up 16% in comparison with the earlier 12 months, slowing from the 28% progress it recorded in 2020.
Co-founder Pony Ma and president Martin Lau joined an earnings name on late Wednesday and acknowledged that 2021 was a “difficult 12 months” for Tencent and China’s web trade extra broadly. Since November 2020, Chinese language authorities have launched a sweeping crackdown in an effort to rein in large gamers in industries starting from tech and finance to gaming, leisure and personal training.
The web trade has confronted “basic adjustments and challenges,” Lau mentioned through the name, including that “new rules have been launched” to appropriate trade misbehavior and promote truthful competitors, consumer safety and knowledge safety.
These “structural trade challenges” have affected Tencent’s monetary efficiency, resulting in slower income progress as the corporate adjusted to the brand new surroundings, Lau mentioned.
Each Ma and Lau endorsed Beijing’s crackdown on the tech trade, reiterating regulators’ phrases that the federal government restrictions will assist finish the trade’s “reckless growth” and “frothy progress.”
“We’re proactively embracing adjustments to higher align ourselves with a brand new trade paradigm,” Lau mentioned, including that the corporate will focus extra on consumer worth, tech innovation, and social accountability.
