7.9%, here is Tencent’s revenue increase for the fourth quarter of 2021 revealed on March 23. If this still represents 144.19 billion yuan, 20.57 billion euros, it is the weakest growth of the Chinese giant since its IPO in 2004, the first in single digits. This result can easily be explained: regulatory pressure in China.
Tencent, a good student who is not spared by Beijing
Tencent isn’t the only Chinese tech company in this situation. Results from Alibaba or JD.com are not much better. During a conference call with the press, Pony Ma, CEO and co-founder of Tencent admitted that the year 2021 was particularly complicated.
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The giant is one of those who have made the most effort to show their credentials in Beijing. He complied with the many new regulations imposed by the government to take control of the Internet and its businesses.
Martin Lau, president of Tencent, reaffirmed his approval of the Chinese crackdown on March 23 reports Bloomberg“ For several years, industry players have overemphasized zero-sum competition, aggressive marketing, mindless expansion, short-term growth and corporate profits, neglecting the most important elements of sustainable growth “.
In fact, Tencent managed to pass between the drops of the most serious sanctions. No record fine like Alibaba or Meituan, or security review experienced by Didi. This situation could change. WeChat Pay is threatened with a record fine for money laundering. Beyond the sum itself, the very model of the super app could be threatened.
The world leader in video games has already been very concretely affected by the restrictions imposed by China on this sector. In August 2021, miners saw their playing time drastically limited. The government has also stopped granting licenses for new games. The growth of the turnover of the native sector of the video games reaches just 1%.
All is not all black for the video game giant
A few notes of hope all the same. Tencent’s fourth quarter was marked by a 60% explosion in company profits. They reached 94.96 billion yuan, 13.54 billion euros. Unfortunately, this gain is temporary since it corresponds to the resale of shares in various companies, including JD.com.
In the longer term, the results of the cloud computing sector are more revealing of this still very much alive giant. Tencent dominates the Chinese market with Alibaba, Huawei and Baidu. Fintech and commerce services revenue, which includes cloud, rose 25 percent to 48 billion yuan, 6.84 billion euros.
Martin Lau announced that Tencent will focus on cloud services, international games and its application to the 1.27 billion monthly active users. It should disperse less to focus on what has built its success.
The president also expects an upturn in spending by advertisers in 2022, also battered by Chinese repression, especially in the education sector. He finally expects a return of licenses for the release of new games in China. Martin Lau hopes that the addition of these factors will mark an improvement in the company’s situation in the second half of 2022.