0700.HK - Tencent Holdings Limited

HKSE - HKSE Delayed Price. Currency in HKD
333.400
-3.400 (-1.01%)
At close: 4:08PM HKT
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Previous Close336.800
Open337.200
Bid333.400 x 0
Ask333.600 x 0
Day's Range333.400 - 339.800
52 Week Range251.400 - 400.400
Volume15,516,860
Avg. Volume15,614,234
Market Cap3.186T
Beta (3Y Monthly)1.54
PE Ratio (TTM)35.13
EPS (TTM)9.491
Earnings DateNov 12, 2019 - Nov 19, 2019
Forward Dividend & Yield1.00 (0.30%)
Ex-Dividend Date2019-05-17
1y Target Est388.16
  • Tencent Will Mitigate Growth Slowdown in Second Half, CLSA's Leung Says
    Bloomberg

    Tencent Will Mitigate Growth Slowdown in Second Half, CLSA's Leung Says

    Aug.14 -- Elinor Leung, CLSA's head of Asia telecom and internet research, discusses the outlook for Tencent Holdings Ltd. after posting a disappointing earnings report. She speaks with Bloomberg's Paul Allen and Shery Ahn on "Bloomberg Daybreak: Asia."

  • Tencent Online Ad Revenue Slows from Bytedance Competition
    Bloomberg

    Tencent Online Ad Revenue Slows from Bytedance Competition

    Aug.14 -- Tencent Holdings Ltd.’s comeback is taking a little longer than expected. China’s leading social media and gaming company posted disappointing revenue growth after rivals like ByteDance Inc. and a broader economic slowdown sapped advertising. Online ad revenue grew a worse-than-expected 16% as the internet wunderkind undercut Tencent’s efforts to load more ads into its WeChat super-app. Bloomberg's Selina Wang has more.

  • Why Tencent's Second-Quarter Earnings Disappointed Investors
    Bloomberg

    Why Tencent's Second-Quarter Earnings Disappointed Investors

    Aug.14 -- Tencent Holdings Ltd. posted disappointing revenue growth after rivals like ByteDance Inc. and a broader economic slowdown sapped advertising. Online ad revenue grew a worse-than-expected 16% as the internet wunderkind undercut Tencent’s efforts to load more ads into its WeChat super-app. Bloomberg's Selina Wang has more on "Bloomberg Daybreak: Australia."

  • Baidu's Stock Surges on Solid Earnings, Hint of Revenue Recovery
    Motley Fool

    Baidu's Stock Surges on Solid Earnings, Hint of Revenue Recovery

    China’s search leader rolls with the punches and expands its ecosystem beyond PCs and mobile devices.

  • Baidu’s CEO Warns of ‘Pain’ After Search Giant Fights Off Rivals
    Bloomberg

    Baidu’s CEO Warns of ‘Pain’ After Search Giant Fights Off Rivals

    (Bloomberg) -- So challenging are the times for Baidu Inc. that even meager revenue growth is cause for celebration.The Chinese search leader’s shares surged as much as 10% in extended trading after it reported sales inched up 1.4% to 26.3 billion yuan ($3.8 billion) in the June quarter, versus projections for a drop. Baidu foresees current-quarter revenue of 26.9 billion yuan to 28.5 billion yuan, flat to down a tad and roughly in line with estimates.The better-than-expected results will soothe investors’ worries for now that the 19-year-old company is losing steam rapidly as China’s internet evolves from desktop to mobile. Yet it continues to grapple with a broader economic slowdown as well as competition for advertisers from Tencent Holdings Ltd. and ByteDance Inc. The latter is chipping away at Baidu’s ad sales via increasingly popular news and social media apps, and also recently launched a general search engine -- a direct challenge to Baidu’s core business.“Facing severe outside challenges and a weak macro environment, the company has initiated a series of groundbreaking changes from top to bottom, involving company structures, personnel moves and business consolidation,” Baidu Chief Executive Officer Robin Li said in a letter to employees after the results. “Despite periodic pain, these changes will have positive and profound impact, enabling Baidu to walk farther and steadier.”Read more: Baidu’s $66 Billion Dive Knocks It Out of China’s Internet Top 5Net income dropped to 2.41 billion yuan, reversing a loss in the prior quarter -- Baidu’s first since going public in 2005. The company enjoyed a near-monopoly in online search after Alphabet Inc.’s Google exited China in 2010 but has in past years suffered a plethora of troubles from a regulatory clampdown over healthcare ads to the departure of a slew of top executives including Xiang Hailong, a 14-year veteran who ran its core search business.The search giant is betting on new technology such as artificial intelligence and self-driving cars, but these pushes aren’t going to pay off financially any time soon. In the meantime, Baidu is investing in content to hold onto users, backing social media platforms including Q&A site Zhihu and science sharing platform Guokr. Daily active app users climbed 27% in the June quarter to 188 million, while subscribers on its Netflix-style iQiyi service grew by about 50% to 100.5 million in June.Baidu had fallen off the list of China’s five most valuable internet companies, trailing Meituan and NetEase Inc., after shedding more than 40% of its market value this year. Once touted as a member of China’s tech triumvirate alongside Alibaba Group Holding Ltd. and Tencent, Baidu has been left behind as the country’s internet evolves.Baidu’s forecast “indicates continued pressure from multiple headwinds, including China’s weakening macroeconomic environment hurting advertisers’ sentiment, the company’s cleanup of low quality health-care advertisers, and the large influx of competitive advertising inventory depressing industry prices,” Bloomberg Intelligence analyst Vey-Sern Ling said.To contact the reporter on this story: Zheping Huang in Hong Kong at zhuang245@bloomberg.netTo contact the editors responsible for this story: Edwin Chan at echan273@bloomberg.net, Colum Murphy, Peter ElstromFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Baidu, Alibaba and Tencent: Investing in China’s AI Revolution
    Motley Fool

    Baidu, Alibaba and Tencent: Investing in China’s AI Revolution

    These three Chinese tech giants are set to benefit from the growth of Artificial Intelligence. Here's why.

  • Why Tencent’s Gaming Business Could Surge in Q3
    Market Realist

    Why Tencent’s Gaming Business Could Surge in Q3

    Chinese tech giant Tencent’s (TCEHY) recent Q2 earnings revealed YoY revenue growth of 20.6% to $12.9 billion. Tencent’s net profit surged 35% YoY.

  • 3 Reasons Tencent Isn’t Worried About the ByteDance Threat
    Motley Fool

    3 Reasons Tencent Isn’t Worried About the ByteDance Threat

    Could the emergence of short-form videos shake up the Chinese internet market?

  • Tencent's Growth Accelerates, but Challenges Loom on the Horizon
    Motley Fool

    Tencent's Growth Accelerates, but Challenges Loom on the Horizon

    The Chinese tech giant is still generating double-digit sales and earnings growth, but two of its main engines are losing steam.

  • Aurora Mobile Limited (JG) Q2 2019 Earnings Call Transcript
    Motley Fool

    Aurora Mobile Limited (JG) Q2 2019 Earnings Call Transcript

    JG earnings call for the period ending June 30, 2019.

  • What to Expect From Baidu's Second-Quarter Earnings Report
    Motley Fool

    What to Expect From Baidu's Second-Quarter Earnings Report

    Expectations are low as the company faces tough headwinds.

  • Shopify’s Success Puts Spotlight on Next Canadian Tech Stars
    Bloomberg

    Shopify’s Success Puts Spotlight on Next Canadian Tech Stars

    (Bloomberg) -- Shopify Inc.’s scorching rally and Lightspeed POS Inc.’s successful trading debut this year are throwing the spotlight on who might be the next Canadian tech star to go public.A total of C$1 billion ($751 million) was invested in 142 venture capital deals in the first quarter, up 48% from a year earlier, according to the Canadian Venture & Private Equity Association. More than half of that was in tech and increasingly from U.S. investors.Here’s what the founders of some of Canada’s hottest tech firms are saying about the future of their companies, and the potential for initial public offerings:ClearbancClearbanc offers $10,000 to $10 million to startups to help fund their marketing campaigns on Facebook, Google and the like in return for a flat fee and a share of revenue.The Toronto-based investment firm, founded in 2015, raised $300 million in new funding led by Highland Capital Partners of the U.S., the largest disclosed VC-financing this year in Canada. That brings total funding to $420 million.Clearbanc plans to offer $1 billion in financing this year and is interested in funding parts of a business that could turn into a repeatable revenue stream--infrastructure, shipping and sales commissions.It’s expanding outside the U.S. and Canada, where there’s a less developed venture ecosystem and “banks are more conservative,” according to co-founder and chief executive officer, Andrew D’Souza.“We think that the fundamentals of the business, the market opportunity, justifies a large standalone business,” D’Souza said about the possibility of an IPO.WattpadWattpad Corp. may no longer be a startup but its ambitions just keep growing. Founded as a mobile-reading app, 12-year-old Wattpad now calls itself a “multi-platform entertainment company.”The Toronto-based company has provided content for one of the most re-watched movies on Netflix (“The Kissing Booth”), a Hulu series (“Light as a Feather”), and this year a Hollywood feature film (“After”), all through Wattpad Studios, launched in 2016.Last week it inked a deal with Penguin Random House in the U.K. to turn its online content, mainly created and read by young women, into books. That follows the launch of its own publishing imprint, Wattpad Books, in the U.S. in April.The company uses data from more than 80 million monthly active users to identify the best stories across its platform and turn them into content. It has launched a paid, ad-free version as well as exclusive content for a fee.Wattpad has raised $117.8 million from investors including OMERS Ventures, Tencent Holdings Ltd.’s capital arm, and August Capital Corp, and is generating revenue in “eight figures,” according to co-founder and chief executive, Allen Lau.As for an IPO, it’s “not what we spend time focusing on,” Lau said. “Our focus right now is on movies and TV shows, with our partners.”VidyardVidyard Inc. wants to be the YouTube of business videos. Its software allows companies to create personalized videos to engage with customers and use data from their viewing habits to analyze that engagement.Companies are expected to spend $103 billion annually in video-ad marketing by 2023, according to Forrester Research.Vidyard counts 1,200 businesses in over 170 countries as its customers, including enterprise customers such as Honeywell International Inc., LinkedIn and Citibank.“In terms of the next two to three years, we’re just focused on consistent, hockey-stick style growth,” says Devon Galloway, co-founder and chief technology officer at Kitchener, Ontario-based Vidyard.The company has raised $60 million to date from investors including OMERS Ventures, Inovia Capital and the venture capital arm of Salesforce Inc.Galloway said if Vidyard continues to grow as well as it has an IPO would certainly be on its path.WealthsimpleWealthsimple Inc., wishes to replace banks as a customer’s primary financial relationship, according to founder and CEO Michael Katchen.“We want to be a firm that demystifies money,” Katchen said in an interview in Bloomberg’s Toronto office. The investment-services company has more than C$5 billion in assets under management and 175,000 customers in Canada, the U.S. and U.K.The robo-adviser favored by millennials, is also targeting wealthier Canadians and has branched out into commission-free stock trading and savings products. Mortgages, life insurance and checking accounts could be next, Katchen said.Founded in 2014, WealthSimple is not yet profitable, but its backers are patient, Katchen said. These include Power Financial Corp., an investment arm run by the Desmarais family and Allianz SE.Katchen said he’s interested in an IPO but it’s still “a few years away.”(Updates with Clearbanc’s financing plan)To contact the reporter on this story: Simran Jagdev in Toronto at sjagdev1@bloomberg.netTo contact the editors responsible for this story: Jacqueline Thorpe at jthorpe23@bloomberg.net;David Scanlan at dscanlan@bloomberg.netFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Moody's

    Tencent Holdings Limited -- Moody's: Tencent's steady 1H 2019 results do not affect its ratings or outlook

    Moody's Investors Service says that Tencent Holdings Limited's (A1 stable) first half (1H) 2019 results were broadly in line with Moody's expectations and do not affect the company's A1 issuer or senior unsecured ratings, or the stable outlook on the ratings. "We expect that Tencent will continue to benefit from revenue diversification and generate positive free cash flow to support its investment needs over the next 12-18 months, while maintaining prudent financial discipline and a credit profile commensurate with its A1 ratings, " says Lina Choi, a Moody's Senior Vice President.

  • AOL tried to buy Facebook, YouTube back in the day, ex-CEO says
    MarketWatch

    AOL tried to buy Facebook, YouTube back in the day, ex-CEO says

    In an alternate universe, AOL is the world’s dominant internet company, worth hundreds of billions of dollars. Maybe even a trillion.

  • What Downturn? Alibaba Reports Steady Results Amid Global Tumult
    Bloomberg

    What Downturn? Alibaba Reports Steady Results Amid Global Tumult

    (Bloomberg) -- Forget the world’s chaos for a moment. Alibaba Group Holding Ltd. is doing just fine.Despite a trade war, the slowing domestic economy and brutally aggressive competition, China’s largest technology company reported revenue and profit numbers that handily beat analyst estimates. Revenue rose a blazing 42%, while net income more than doubled. Shares popped 3% in U.S. trading.Insulated because of its predominantly domestic business, Alibaba is benefiting from a demographic shift to internet shopping. Chinese online sales accelerated in the June quarter, helped by sales promotions that unfolded across the country’s largest e-commerce platforms. Alibaba’s report dropped just as the risks of a recession spike, U.S.-China trade tensions ratchet up yet again and archrival Tencent Holdings Ltd. warns of a tough economic outlook.“It’s surprising how resilient Alibaba is,” said Michael Norris, a Shanghai-based research and strategy analyst at consultancy AgencyChina. “There’s a big disconnect between Wall Street, which has really given a beating to Alibaba’s shares, and people on the ground.”Revenue rose 42% to 114.9 billion yuan ($16.3 billion) in the three months ended June, while net income also came in ahead of expectations at 24.4 billion yuan. That was helped by more than 4.3 billion yuan of pretax profit from Ant Financial, the payments-to-lending affiliate controlled by billionaire Jack Ma.“Despite the macro environment not being as good as last year, Alibaba has launched a lot of new initiatives and the personalized product feed is helping maintain its growth rate,” said Steven Zhu, an analyst with Pacific Epoch. “Its live-streaming services and collaboration with international brands are helping.”The economic slowdown is eroding parts of the company’s sprawling empire of e-commerce, retail stores, delivery services and more. Revenue in its digital media and entertainment segment inched up just 6%, despite streaming service Youku enlarging its average daily subscribers by 40%. Growth in its cloud computing division, which commands half the country’s market share, slowed to a still-respectable 66%.Small and mid-sized enterprises may be leery of spending on ads -- Alibaba’s biggest source of income -- given the current environment. That prompted Chief Financial Officer Maggie Wu to tell analysts Alibaba is in no rush to monetize its new shopping recommendation feeds.Longer term, investors have raised flags about the impact on margins of Alibaba’s enormous spending on so-called new retail -- its effort to use technology to overhaul physical retailers -- and deepen its footprint in lower-tier cities and rural areas. Alibaba said it will continue to invest in those initiatives, as well as on-demand services like food delivery unit Ele.me, which is fighting a fierce, money-losing battle with giant Meituan.Alibaba is approaching a critical juncture just as Chief Executive Officer Daniel Zhang prepares to replace billionaire co-founder Ma as chairman in September. A U.S. campaign of tariffs and other curbs is heightening uncertainty around the world’s second-largest economy, while the emergence of rivals at home such as Pinduoduo Inc. tests its longstanding dominance of Chinese online retail.The e-commerce titan may be on the look-out for assets to bolster its lead. Alibaba is in talks to pay $2 billion for NetEase Inc.’s Kaola, which specializes in selling foreign goods to Chinese consumers, local media outlet Caixin reported.The company is also hatching plans to raise more capital. Alibaba’s quarterly performance bolsters its ambition of pulling off what could be Hong Kong’s biggest share sale since 2010. The company is said to have already filed confidentially for a stock listing, but it’s unclear when it might go ahead with the float given the widespread protests that have gripped Hong Kong over the past 11 weeks. Executives made no mention of the issue during their conference call.Overall, adjusted earnings per share came to 12.55 yuan versus the 10.3 yuan projected. Net cash slipped 4% in the quarter, depressed by a $250 million cash settlement reached last quarter on a U.S. federal class action lawsuit.The “key standout for us is that Alibaba’s China commerce business grew 40%, close to twice the rate of the China online retail industry,” said Neil Campling at Mirabaud Securities. “The scale benefits are paying off and Alibaba is enjoying both active consumer growth momentum and higher average spend.”\--With assistance from Zheping Huang and Sheryl Tian Tong Lee.To contact the reporter on this story: Lulu Yilun Chen in Hong Kong at ychen447@bloomberg.netTo contact the editors responsible for this story: Peter Elstrom at pelstrom@bloomberg.net, Edwin Chan, Colum MurphyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • [video]Alibaba's Revenue Momentum Compares Favorably with Tencent's
    TheStreet.com

    [video]Alibaba's Revenue Momentum Compares Favorably with Tencent's

    The Chinese e-commerce giant soundly beat June quarter estimates while reporting strong for its bread-and-butter Chinese e-commerce operations.

  • Tencent Leans on Renewed Gaming Growth
    Motley Fool

    Tencent Leans on Renewed Gaming Growth

    This time, it's slower advertising growth that has the market worried.

  • Financial Times

    Alibaba revenues rise 42% on China online shopping surge

    The tech giant reported a 42 per cent year on year jump in revenues to Rmb114.92bn ($16.74bn) in the three months to June, driven by a rise in China retail, along with food delivery service ele.me — which was consolidated in May last year — and cloud. While Alibaba and Tencent are both tech conglomerates, Alibaba has its roots in ecommerce and has ridden the wave of rising online shopping while also coming under less regulatory pressure from the likes of gaming and videos.

  • Bloomberg

    Baidu’s $66 Billion Dive Knocks It Out of China’s Top 5 Internet Companies

    (Bloomberg) -- Baidu Inc. has dropped off the list of China’s five most valuable internet companies, underscoring the challenges facing the search giant from a weakening economy to intensifying competition.NetEase Inc., China’s second-largest gaming house, has overtaken Baidu in market value after posting better-than-expected quarterly earnings last week. Shares of NetEase have gained 11% this year, while Baidu’s plunged 40%. The latter company, once touted as a member of China’s internet triumvirate alongside Alibaba Group Holding Ltd. and Tencent Holdings Ltd., has bled $66 billion of capitalization since its peak in May 2018 -- the equivalent of one Morgan Stanley.Baidu has struggled to fend off competition from the likes of Tencent and ByteDance Inc., both of which are luring smartphone-savvy consumers and advertisers to their popular mini-video and social media apps.The company enjoyed a near-monopoly in Chinese internet search after Google departed the market in 2010 over government censorship. This week, ByteDance launched its own standalone search engine, posing a serious threat to the almost two-decades-old Baidu. The company was previously pushed out of the Top 3 in market value by e-commerce operator JD.com Inc. and food delivery service Meituan.Baidu, together with rivals Alibaba and Tencent, has long formed part of a trio of leading internet companies known by the acronym BAT. Now even that title seems under threat, with some dubbing ByteDance the new “B” in the group. Baidu in May posted its first quarterly loss since its 2005 stock market debut, after the Chinese economy slowed and rivals chipped away at its advertising sales.To contact the reporter on this story: Zheping Huang in Hong Kong at zhuang245@bloomberg.netTo contact the editors responsible for this story: Edwin Chan at echan273@bloomberg.net, Colum MurphyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Hong Kong Stocks Rise as Bargain Hunters Descend After Rout
    Bloomberg

    Hong Kong Stocks Rise as Bargain Hunters Descend After Rout

    (Bloomberg) -- Stocks in Hong Kong and China rose, contrasting with losses elsewhere in Asia following a global sell-off.The Hang Seng Index closed up 0.8% after falling as much as 1.6%, lifted by property-related stocks. A gauge of Chinese stocks in Hong Kong climbed 0.4%. Both have lost around 16% from their April highs, weighed down by the U.S.-China trade dispute and protests in Hong Kong. The Shanghai Composite Index added 0.3% and the yuan weakened slightly onshore. The small-cap ChiNext index rose 1.2%."The market was seriously distressed after earlier selloffs, so we’re seeing a dead cat bounce right now along with some possible short covering," said Alex Wong, Director of Asset Management at Ample Capital Ltd. The Hang Seng Properties Index gained 3.3%, its biggest increase since January, after weeks of anti-government protests in Hong Kong dragged the gauge to its lowest this year. New World Development Co. saw its biggest gain since 2009.Stocks dropped elsewhere in Asia after the U.S. government bond market sounded alarms over the health of the economy. The 10-year Treasury yield slipped below the rate on two-year bonds for the first time since 2007, in what is considered to be a signal of a U.S. economic recession beginning in next 18 months. Such expectations have been bolstered by signs that global growth is slowing, prompting investors to flee riskier assets.“The market is already is quite weak and this additional risk from the inverted curve would put more pressure on,” said Daniel So, strategist at CMB International Securities Ltd.Tencent Holdings Ltd. was a drag on Hong Kong stocks, falling as much as 4.2% after its quarterly revenue missed expectations. The results triggered several price cuts by analysts, who expect the social media giant’s online advertising business to remain sluggish due to intensifying competition.“Fear of a U.S. recession added to market worries as poor second-quarter economic data in Asia already concerned investors,” said Banny Lam, head of research at CEB International Investment Corp. “Tencent’s earnings miss is also affecting the market.”Hong Kong Roiled by Recession Fears, Market Plunge, Retail SlumpMainland investors continued to pile into Hong Kong stocks via exchange links with Shanghai and Shenzhen as some investors see dip buying opportunities. They pumped money across the border to buy stocks for a 20th day on Thursday, spending $589 million according to data compiled by Bloomberg, extending the longest streak of inflows since February last year.Wharf Real Estate Investment Co., Link Reit and Sun Hung Kai Properties Ltd. added at least 4%, among the best performers on the Hang Seng Index. MTR Corp., which develops real estate in Hong Kong and operates the city’s railway network, advanced 4.4%.The Hong Kong dollar jumped as much as 0.17%, as 12-month forward points surged in a sign of tighter liquidity in the market. It pared the advance to 0.1%.To contact Bloomberg News staff for this story: Amanda Wang in Shanghai at twang234@bloomberg.net;Kari Lindberg in Hong Kong at klindberg13@bloomberg.netTo contact the editors responsible for this story: Sofia Horta e Costa at shortaecosta@bloomberg.net, David Watkins, Will DaviesFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Financial Times

    Alibaba posts revenue jump ahead of changeover in top management

    China’s Alibaba trumped analysts’ expectations with a 42 per cent year-on-year jump in quarterly revenues to Rmb114.92bn ($16.3bn), a day after its rival Tencent disappointed the market by posting more modest growth. Alibaba’s roots in ecommerce have allowed it to benefit from the rise in online shopping, a sector subject to less regulatory pressure than gaming and messaging, which are Tencent’s biggest businesses. as chairman to Daniel Zhang, chief executive officer, next month, part of a changing of the guard that has been accompanied by a broader reshuffle among the top ranks of the two-decade-old company.

  • Financial Times

    China masses troops in stadium near Hong Kong

    Just a few kilometres away from the Asian financial centre, the Shenzhen Bay Sports Center was packed with thousands of members of China’s People’s Armed Police (PAP) — the armed forces’ unit dedicated to crushing internal unrest — practising drills on Thursday morning. “They arrived about a week ago because of the current chaos in Hong Kong,” said a cleaner at the sports centre who declined to give his name for fear of losing his job. There was no official confirmation of why the personnel were gathered there, with authorities earlier saying a previous drill by police was in preparation for the anniversary of the People’s Republic of China on October 1.

  • Tencent’s Revenue Misses as ByteDance Chips Away at Ad Growth
    Bloomberg

    Tencent’s Revenue Misses as ByteDance Chips Away at Ad Growth

    (Bloomberg) -- Tencent Holdings Ltd.’s comeback is taking a little longer than expected. The Chinese social media giant’s shares tumbled more than 4% after quarterly revenue fell short of analysts’ projections.China’s leading gaming company posted disappointing growth after rivals like ByteDance Inc. and a broader economic slowdown sapped advertising. Online ad revenue grew a worse-than-expected 16% as the internet wunderkind undercut Tencent’s efforts to load more ads into its WeChat super-app.The social media giant is trying to bounce back from a horrendous 2018, when a regulatory clampdown walloped its marquee games business. While regulators are again green-lighting games after last year’s freeze -- including Tencent’s breakout hit of 2019, Peacekeeper Elite -- they’re doing so at a slower pace. The emergence of a formidable competitor in ByteDance, the world’s most valuable startup, has also exacerbated the cooling effect on marketing spending of a sputtering Chinese economy.“Tencent’s advertisement revenue was disappointing, partly due to competition from ByteDance,” said Canaan Guo, an analyst at Pacific Epoch. “Even though WeChat increased its ad inventory, it wasn’t able to fully sell its ad space because it charges more than rivals.”Tencent reported revenue of 88.8 billion yuan ($12.7 billion), lagging the 93.4 billion yuan average estimate and spurring several analysts to cut price targets on the company. While sales of social media ads and “others” jumped 28%, media ad revenue slid 7% because of unexpected delays in the airing of certain drama series. The stock slid as much as 4.2%, caught up also in a broader Asian market selloff.“Our assumption is that the macro environment will remain difficult for the rest of the year,” Chief Strategy Officer James Mitchell told analysts on a conference call. “The situation of the heavy supply of advertising inventory will continue for the rest of the year, and potentially into the next year,” he said, adding this could affect revenue from the automobile, real estate and financial services sectors.Click here for a Live Blog on Tencent’s resultsTencent can still accelerate growth, riding Peacekeeper Elite as well as older, durable titles such as Honour of Kings. It released 10 games in the second quarter. To fend off ByteDance, it’s adding content and services to WeChat, partnering with the likes of Q&A platform Zhihu and funneling more of its 1 billion-plus users to mini-programs -- lite apps that offer third-party services from ride-hailing and food delivery to bike sharing. WeChat, the ubiquitous messaging service that acts as a gateway to those activities, grew users 7% to 1.1 billion.“We expect gaming revenue to re-accelerate starting from the second quarter onward,” said David Dai, a Hong Kong-based analyst at Bernstein, adding this would also drive an acceleration of overall revenue.Net income rose a better-than-expected 35% to 24.1 billion yuan in the three months ended June, but that was boosted by gains of more than 4 billion yuan partly from the rising valuation of investees. The company is one of China’s most prolific tech investors, and in past years has acquired slices of major startups from ride-sharing giant Didi and on-demand services firm Meituan to video site Kuaishou. Hunkering down for tougher times, selling and marketing expenses dived 26%. But Tencent will continue to invest in gaming and video content production, and also get more active in exploring opportunities in enterprise tech, education and healthcare-related startups, Mitchell said.Some of Tencent’s younger divisions came through. The fintech and business services group -- a newly formed unit that includes cloud and payments -- grew revenue 37% to 22.9 billion yuan. Its Licaitong wealth management platform, which competes with rival Chinese billionaire Jack Ma’s Ant Financial, had accumulated 800 billion yuan of customer assets by the end of June. And it’s making “strong” inroads into short video, President Martin Lau said, addressing one of ByteDance’s fortes. The company will study user behavior and send targeted mini-videos via Tencent’s Weishi product, he added.The company however still derives the lion’s share of its revenue from gaming. Tencent’s biggest hit of 2019 -- bereft of much of the violence typical of duel-to-the-death titles, to appease regulators -- is expected to generate $1 billion in revenue by the end of the year, according to gaming consultant Niko Partners. Peacekeeper Elite pays tribute to China’s air force and Tencent sought out the country’s military recruitment arm for advice during development. It’s snagged more than 50 million daily active users since the title launched, Tencent said.The game should have brought in $49 million of revenue in May and June, or about two thirds of the revenue generated by long-time favorite Honour of Kings, Bernstein’s Dai said. He estimates that Tencent’s gaming revenue growth could surpass 20% in the third and fourth quarters. Mitchell said on the conference call that the company had deferred a “large portion” of revenue from its hit, without elaborating.(Updates with shares from the first paragraph.)\--With assistance from Zheping Huang, Shelly Banjo and Sheryl Tian Tong Lee.To contact the reporter on this story: Lulu Yilun Chen in Hong Kong at ychen447@bloomberg.netTo contact the editors responsible for this story: Peter Elstrom at pelstrom@bloomberg.net, Edwin Chan, Colum MurphyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.