BUSINESS Tecent faces tight regulatory oversight despite strong Q1 earnings

BUSINESS

Tecent faces tight regulatory oversight despite strong Q1 earnings

Global Times

23:23, May 20, 2021

Tencent's logo (File photo: IC)

Chinese technology giant Tencent Holdings said on Thursday that it treats the matter of regulatory oversight seriously, as the company faces tight scrutiny as part of China's efforts to tackle problems at online platforms, despite strong first quarter earnings.

At a teleconference with investors, a Tencent executive said that regulators' attention is "not just focused on fintech firms but the industry as whole," when asked about the issue of financial oversight from regulators.

The company always attaches great importance to regulatory oversight, with longstanding internal audits to ensure compliance, the executive said.

Tencent posted a first-quarter profit of 47.76 billion yuan ($7.42 billion), up 65 percent year-on-year, according to its financial report released on the same day.

Revenue increased 25 percent to 135.3 billion yuan, it said.

Tencent is the world's biggest gaming firm by revenue, and it is also the operator of WeChat, the biggest social network in China.

In the first quarter, Tencent said that revenue generated from online games rose 17 percent, and the number of monthly active users reached 1.24 billion, up 3.3 percent year-on-year.

The company has been under government scrutiny for anti-trust behavior. On Tuesday, Tencent Music, the company's music-streaming platform, said that it was facing tighter supervision and that it was actively cooperating with the antitrust regulator.

Last month, Tencent was among a number of companies that were given 500,000-yuan fines over anti-monopoly breaches by the State Administration for Market Regulation.

The company was found to have breached relevant provisions, but regulators ruled out the effects of exclusivity or restriction on competition.

China has been ramping up crackdowns on its digital platforms, as the digital economy accounts for a growing proportion of the world's second-largest economy.

In the first quarter, Tencent Music generated 7.82 billion yuan of revenue, up 24 percent year-on-year.

Revenue from online music subscriptions increased 40.2 percent to 1.69 billion yuan, according to the financial report.

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