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Tencent posts no revenue growth in first quarter, misses estimates By Reuters

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© Reuters. FILE PHOTO: A logo of Tencent is seen during the World Internet Conference (WIC) in Wuzhen, Zhejiang province, China November 23, 2020. REUTERS/Aly Song

By Josh Ye

HONG KONG (Reuters) – Chinese gaming and social media giant Tencent Holdings (OTC:) posted virtually no revenue growth in the first quarter, its worst performance on record, and also missed estimates of the market due to the economic slowdown in China and the freezing of new game licenses weighed on its activity.

Revenue totaled 135.5 billion yuan ($20.08 billion) in the quarter ended March, compared with 135.3 billion yuan in the same quarter last year, and below an average estimate of 141 billion yuan from 16 analysts, according to Refinitiv.

Tencent, which makes much of its money developing games such as “Honor of Kings” and “Call of Duty Mobile,” said the company’s profit attributable to shareholders for the quarter also fell 51%. It’s the biggest decline in earnings since the company went public in 2004, according to data from Refinitiv.

The slower pace of growth follows the previous two quarters of slower sales. Tencent – China’s most valuable company – has seen its opportunities for expansion curtailed by a regulatory crackdown from Beijing aimed at curbing the influence of big internet companies.

The Shenzhen-based tech giant has been impacted by the normalization of user spending on games after a surge over the past two years. Meanwhile, a resurgence of COVID-19 in China has also dampened payment activity.

($1 = 6.7488 renminbi)

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