Tencent’s profit falls for the first time since 2005

1 min read

Tencent posts first profit decline since 2005 on lower gaming revenue, investment gains – SCMP

What happened: Chinese tech giant Tencent has reported a 2% drop in second-quarter profit as a result of lower gaming revenue and investment-related gains. The company’s net income fell to RMB 17.9 billion ($$2.6 billion) compared to the RMB 19.3 billion analysts expected. Tencent’s sales also missed expectations, with its mobile-gaming business reporting a decline of 19% compared to the previous quarter.

Why it’s important: Tencent’s has already lost $150 billion in market value since January. Shortly after reporting its Q2 earnings, its share price fell by 3.6%. In April, the company lost over $20 billion in value after early investor Naspers trimmed its stake by 2%. This was followed by Tencent’s president Martin Lau selling one million of his shares in the company. Most recently, the company was stricken by regulators ordering the removal of “Monster Hunter: World” from Tencent’s WeGame platform. The country’s content regulator said it had received complaints about the game. The removal was followed by Tencent losing $15 billion in value over concerns about gaming revenue.