Abhoy Sarkar's Avatar
published in Blogs
May 22, 2022
Tencent (TCEHY,$44.25) disappoints on Q1 revenue

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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