Tencent marked a partial change of fortunes in its quarterly results, reporting a 26 per cent year-on-year increase in profit before income tax to Rmb27.91bn ($4bn), but continued to disappoint on revenues.
The profit jump underscores the new mood of financial discipline in a sector better known for its profligacy. Tencent is cutting back on marketing spend, discounts to woo new users to its payment platform and even mergers and acquisitions in the face of weaker economic growth at home.
Capital spent on deals had slowed notably from the first half of last year, when Tencent was spending heavily to push into new retail, as well as more divestments, said chief strategy officer James Mitchell. “In some months, [divestments] matched investments,” he said.