China's internet crackdown pushes Tencent to slowest profit growth in 2 yrs

SHANGHAI (Reuters) - Chinese gaming and social media giant Tencent Holdings posted a 3% rise in third-quarter profit on Wednesday, its slowest growth in two years, impacted by increased regulation and a slowdown in advertising.

Net profit for the three months through September rose to 39.5 billion yuan ($6.18 billion), the company said in a statement. This beat analyst expectations who were predicting a decline, according to Refinitiv data.

Revenue climbed 13% to 142.4 billion yuan, slightly below expectations, and was the slowest quarterly growth since the company went public in 2004, Refinitiv data showed.

China's largest company by market value was hit by new limits on the amount of time minors can spend playing video games. The government has not approved any new games since August.

Beijing's year-long crackdown on its once-freewheeling internet industry has punished well-known companies for engaging in what were previously considered regular market practices, wiping billions of dollars off their market values.

"During the third quarter, the internet industry, including the domestic games industry, and certain advertiser categories, adapted to new regulatory and macroeconomic developments," Tencent's Chairman and CEO Pony Ma said in a statement.

"We are proactively embracing the new regulatory environment which we believe should contribute to a more sustainable development path for the industry."

Sales from mobile games rose 9%, the owner of games such as "Honor of Kings" and "PUBG mobile" said in a statement.

 

 

(Reporting by Brenda Goh; Editing by Andrew Heavens and David Goodman)