Tencent Is Ready to Back Its Biggest Investment Yet
Humility and obedience are a required down payment for companies hoping to show their fealty to Chinese regulators.
Tencent’s businesses are under fire on multiple fronts.
Photographer: Qilai Shen/BloombergTencent Holdings Ltd.’s $223 billion portfolio2 of shares helped it post record earnings in the June quarter. But with regulators on the warpath, the Chinese games and social media company will be looking to profit from a different type of investment: contrition.
While most famous for its WeChat messenger and booming online games business, almost half its profit last quarter came from upward revaluations of its vast collection of stakes in other companies. It needed the boost. Earnings from its core division1 climbed just 9.2% while advertising gross profit grew a mere 17%.