Tencent (TCEHY,$44.25) disappoints on Q1 revenue

Tencent posted its first quarter results, where revenue across all business segments slipped -0.12% from the year-ago quarter to 135.47 billion yuan —below FactSet consensus estimates for 140.82 billion yuan. The Chinese company’s profit attributable to shareholders decreased by -23% from a year ago.

Revenue from the business segment that includes gaming (which is Tencent's largest  source of revenue) experienced mild growth from the prior quarter and the year-ago period to 72.74 billion yuan in first quarter revenue. The segment was impacted by challenges from Beijing's restrictions on licensing new games and a slower growth in the international market.

Revenue from Fintech and business services segment (Tencent’s second-largest revenue driver) plunged  by -10.8% quarter-on-quarter-- the first sequential drop since Q1 2020 when there was COVID-19 related lockdowns across a large part of mainland China. The segment grew by 10% from a year ago, but missed FactSet estimates by 3.41 billion yuan. It also showed a substantial  slowdown from a 25% increase in Q4 2021.

Tencent’s mobile payment apps WeChat registered monthly active users growth (domestically and internationally) of +3.8% from a year ago to 1.29 billion users.

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Sergey Savastiouk|Expert

Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.