Tencent’s Profits Surge to $35 Billion Despite ‘Challenging Year’
variety.comPatrick Frater Asia Bureau ChiefNet profits at Tencent climbed by 41% to $35 billion at Tencent, China’s social media, games and streaming giant, in the year to December.
Revenues were up by 16% to RMB560 billion ($87.8 billion).Despite the profits surge, the company’s management described 2021 as a “challenging year.”They were not being disingenuous.
China’s tech sector has operated for nearly two years under a cloud of increased regulation, political uncertainty and, recently, whipsawing share prices.Barely a week ago, Tencent’s Hong Kong listed shares were crushed down to ten-year lows as regulatory uncertainty for Chinese companies caused leading finance firm JPMorgan to describe the sector as “uninvestable.” Two days later, the company’s shares rebounded by an astonishing 25% as the Chinese government outlined a more accommodating economic policy. (Some commentators even inferred a bottom to the current cycle of tech regulation.) Regulators are known to have crimped Tencent’s huge Chinese games business by a halt on new games approvals and through technical measures intended to reduce games addiction in minors.
They have ordered changes to Tencent’s growing financial services business and imposed new laws on data privacy and other restrictions on the use of data within the same group.
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