Chinese internet giant Tencent on Wednesday reported record-low quarterly revenue growth as Beijing’s regulatory crackdown — and the country’s economically debilitating coronavirus lockdowns — continued to wipe out gains in the tech sector.
Revenue for the Shenzhen-based firm came in at 135.5 billion yuan ($20.1 billion) in the first quarter, putting year-on-year growth at nearly zero.
Revenue growth for Tencent has slumped for seven straight quarters and has reached the slowest pace since the company went public in 2004, according to Bloomberg.
Profit for the first quarter fell 51 percent compared to the year before, down to 23.4 billion yuan ($3.47 billion).
Tencent “implemented cost control initiatives and rationalised certain non-core businesses” during a “challenging first quarter”, founder and CEO Pony Ma said in a statement.
Tencent has so far escaped the worst of China’s 18-month crackdown on the tech sector, driven by Beijing’s fears that private companies have grown too quickly and control too much data.
But the company — which used to be known for its world-leading growth — has still lost nearly $520 billion in value since its 2021 peak, according to Bloomberg.
Tencent also has to contend with a nationwide economic slump as China remains committed to a rigid zero-Covid policy, the last major global economy to do so.
Tencent’s first-quarter results came a day after China’s top economic official made a public show of support for digital platform companies, prompting speculation that Beijing’s crackdown on Big Tech may soon ease.
Chinese vice premier Liu He offered support for “the sustainable and healthy development of the platform economy and the private economy,” according to state broadcaster CCTV.
He also vowed to “support digital firms listing in domestic and foreign capital markets”, CCTV reported.
The Hong Kong-listed shares of Tencent fell 0.76 percent to close at HK$365.6 ($46.6) on Wednesday ahead of the results announcement. (AFP)
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