Tencent’s earning’s call on Wednesday (August 15, 2018) has understandably caused a lot of debate. The first drop in profits in 10 years is certainly something worthy of discussion and Tencent’s share price has clearly had a horrid time of things this year. Yet I’ve found myself confused at the narratives being spun around this situation.

Below I break down two of the reasons for being less optimistic about Tencent and offer a different take on things. I also rate each issue based on its impact on the long-term health of the company.

This has garnered the most attention recently and rightly so given that its new information for most of us and a pretty unique situation. It’s not every earnings call where we are treated to the spectacle of Tencent’s higher management having to explain the gory details of how government approval processes work. They found themselves in the rather awkward situation of having to explain to investors exactly why they essentially have their hands tied and can’t monetize their top blockbuster titles in China.

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Matthew Brennan

Matthew is a well-known speaker and writer about WeChat and Tencent (China's largest internet company). Matthew's company China Channel organizes China’s largest WeChat marketing conference series for...