Tencent president Martin Lau revealed the gaming and social media giant is preparing for more regulatory action in the near future, noting a crackdown on internet companies is a global trend and not limited to China.
On an earnings call, Lau explained increased scrutiny of the internet should be expected because regulations hade been loose relative to the size and importance of the industry.
He added the government wants to foster the long-term sustainable development of the internet and Chinese regulators are “a bit ahead” in terms of execution on a “more structural regulation framework”, focused on identifying and rectifying industry misbehaviours, and emphasising compliance, social responsibility and fair behaviour.
Chairman and CEO Pony Ma said the company recorded “healthy growth rates” in Q2 across its business lines, particularly business services and advertising, while games benefitted from international growth, with 25 per cent of revenue from non-domestic sales..
Net profit grew 29 per cent from Q2 2020 to CNY42.6 billion ($6.6 billion), aided by one-off gains of CNY20.8 billion related to investments. Revenue increased 20 per cent to CNY138.3 billion.
Mobile games revenue rose 13 per cent to CNY40.8 billion on higher ARPU and paying-user ratios. CSO James Mitchell credited growth to its Honor of Kings and Moonlight Blade Mobile titles in China, and by PUBG Mobile and Clash of Clans internationally.
PC client games revenue grew 1 per cent to CNY11 billion. Social networks sales increased 9 per cent to CNY29 billion, attributed to growth from digital content services and in-game virtual sales.
Online advertising increased 23 per cent to CNY22.8 billion, and fintech and business services grew 40 per cent to CNY41.9 billion.
Monthly active users (MAUs) of messaging service WeChat and Chinese version Weixin increased 3.8 per cent to 1.25 billion, but dropped 8.8 per cent to 590.9 million on mobile messaging platform QQ.
Its workforce increased 33 per cent to 94,000. Capex fell 27 per cent to CNY6.9 billion.Subscribe to our daily newsletter Back