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Tencent game amid loss
Index heavyweight Tencent (0700) posted a slump in fourth-quarter earnings on increased spending as its prized games business showed signs of recovery after a brutal 2018.
Net profit fell 39 percent quarterly, or 32 percent yearly, to 14.2 billion yuan (HK$16.65 billion) in the three months ended December, missing the 17.55 billion-yuan average of estimates.
A final dividend of HK$1 per share was declared. Net profit for the year saw 10 percent growth to 78.72 billion yuan, the smallest annual increase since the firm launched.
While approvals in China have started to resume, Tencent has yet to monetize Fortnite or the mobile version of PlayerUnknown's Battlegrounds, the most popular smartphone game on the planet.
The company was able to release nine games in the quarter but wasn't able to provide an update on when that could happen for PUBG.
"Games of the same genre like PUBG were able to get licenses in China, we are working actively to communicate on it" with regulators, president Martin Lau Chi-ping told reporters yesterday.
Revenue was 84.9 billion yuan compared with estimates for 83.4 billion yuan. But costs surged 43 percent from a year earlier, as content and financial technology bills pile up.
Tencent plans to introduce a new category of revenue when it reports first-quarter earnings to reflect its more diversified sales.
Tencent is also shaking up its management ranks with Lau confirming that the company has put 10 percent of its executives on notice with poor performers to be weeded out to bring in new blood.
Adjusted earnings-per-share were 2.07 yuan, better than the projected 1.83 yuan. Revenue from the Value Added Services unit, which includes online games and messaging, climbed 9 percent to 43.7 billion yuan. WeChat's monthly active users rose to 1.1 billion, while the mobile version of QQ had 699.8 million users at the end of the quarter.
Tencent's European traded shares fell 4 percent after the results were announced. Shares of Tencent fell 1.89 percent to HK$363 yesterday in Hong Kong ahead of the earnings announcement.
Source: The Standard
http://www.thestandard.com.hk/section-n ... 0322&sid=2