China's Tencent Holdings (0700.HK) reported on Wednesday its first ever quarterly sales fall, hurt by a lack of game approvals and regulations that limit playing time, as well as COVID-19 lockdowns and a weak economy that squeezed ad sales.
The contraction marks a nadir for the gaming giant and owner of the WeChat messaging platform which has reported double digit growth almost every quarter since it went public in 2004, as Beijing's crackdown on big tech companies that began in late 2020 puts the brakes on its expansion.
Tencent plans to sell all or a bulk of its $24 billion stake in food delivery firm Meituan (3690.HK) to placate domestic regulators, Reuters reported on Tuesday. read moreThe company said on Wednesday revenue declined 3% to 134.034 billion yuan ($19.78 billion) for the three months ended June 30 from 138.259 billion yuan a year earlier. It has fallen for two straight quarters and the result compares with an analysts' consensus forecast of 134.6 billion yuan.
Ma Huateng, chairman and CEO of Tencent, said, "During the second quarter, we actively exited non-core businesses, tightened our marketing spending, and trimmed operating expenses, enabling us to sequentially increase our non-IFRS earnings, despite difficult revenue conditions."
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