Amid China's regulatory crackdown on the tech companies, Tencent's shares have dropped to over 3% in Hong Kong listing on Thursday, March 24.
The tech giant saw a sharp plunge in its revenue for the fourth quarter of 2021, according to the latest report. To date, it's the slowest-ever growth that took place in the company.
Tencent Shares Suffers Unexpected Drop
After Wall Street witnessed a decline of 5.4% in the shares of Tencent, a follow-up report suggested that the company did not do well during the last quarter of 2021.
According to CNN's latest report, the stocks of the Shenzhen-based tech firm encountered a sharp drop on its record. The last time that it suffered from such a decline was in 2004 when Tencent was listed on the Hong Kong Stock Exchange.
Moreover, the company only reported revenue of $22.6 billion or 144.2 billion yuan for the covered period of last year. Compared to its 2020 revenue, an increase of 16% in the annual revenue in 2021 was recorded.
Related Article : Tencent Plans to Downsize in 2022 | Divestments and Less Acquisitions to Ride Out China's Regulatory Storm
2021 Was a 'Challenging Year' For Tencent
During the earnings call on Wednesday, March 23, Tencent president Martin Lau and Pony Ma, the company's co-founder, said that the company has indeed struggled last year, especially with the ongoing crackdown of the Chinese authorities.
According to them, 2021 was a "challenging year" to remember for the whole organization which has faced difficulties. Ever since the Chinese government implemented a regulatory crackdown in the tech sector, several corporations like Tencent have been affected.
Lau was aware of the "fundamental changes and challenges" that the internet industry has dealt with. He continued that the newly-brought regulations are there to promote fair competition, and protection to all users and even their data. The policies are also there to diminish the misbehavior in the industry.
Furthermore, he said that all of these have become a big factor for the declining "financial" performance of Tencent. These later resulted in sluggish revenue growth, and he admitted that the company is gradually coping with the changes in the new landscape.
Despite the crackdown's impact on the tech sector, Lau and Ma are open to embracing these implementations. They both agreed to the fact that there should be more focus on social responsibility and technological innovation on top of users' ethics.
More About Tencent
In other news, the Chinese tech titan wants to explore setting up a financial holding entity for WeChat Pay, per CNBC.
Elsewhere, Tech Times reported in another story that Tencent kicked out 70 employees after the alleged anti-graft campaign in January. Aside from that, it also put 13 firms on the blacklist because of their involvement in the case.
Last week, another report said that the said company and Alibaba will lay off thousands of their workers for 2022 following the continuous regulatory crackdown in China.
This article is owned by Tech Times
Written by Joseph Henry
