Tencent Holdings Suffers Greater Than Expected Net Income Drop in Fourth Quarter, with a 75% Decline to 27.025 Billion Yuan ($3.75 Billion). This decrease is partly explained by the one-time profit from the sale of its stake in the Chinese food delivery service Meituan in the previous year. Despite an economic slowdown in China, revenue increased by 7.1% to 155.20 billion yuan in the same period but fell short of analyst expectations.

Revenue from Core Business, Comprising Games and Social Networks and Accounting for 45% of Total Sales, Fell 2% to 69.08 Billion Yuan in the Fourth Quarter. While Domestic Game Sales Decreased by 3% to 27.0 Billion Yuan, International Game Sales Rose Slightly by 1% to 13.9 Billion Yuan. Tencent President Martin Lau Pointed Out That Revenue from Domestic Gaming Business Was Weak in 2023, with Stagnant Monetization in the Two Main Games "Peacekeeper Elite" and "Honor of Kings". Nevertheless, the Company Expects Improvements Starting from the Second Quarter, Particularly with the Launch of the Blockbuster Title "Dungeon & Fighter Mobile".

Prospects for Improvement Signal a Positive Change for the Video Game Manufacturer as Beijing Eases its Stance on Video Game Sector, and Game Approvals Seem Back on Track. Chinese Regulators Recently Approved a New Batch of Imported Titles, Including Tencent's DnF Mobile Game with its Korean Partner Nexon, as Part of Efforts to Reverse a Prolonged Decline in the Country's Stock Markets and Bolster the Slowing Economy.

Despite these positive developments, Tencent's shares have not yet fully recovered from their slump in December, when they fell by 12% following suggestions by the Chinese video game regulatory authority to limit the time and money people spend on computer and smartphone games. The shares closed on Wednesday at 288.80 Hong Kong dollars, compared with about 310 HK$ at the end of 2023. Tencent also announced an increase in the dividend for 2023 to 3.40 HK$ per share, compared to 2.40 HK$ in 2022, and intends to double the share buybacks this year to over 100 billion HK$, from 49 billion HK$ in 2023. Lau emphasized that the company's shares are undervalued and that an increase in buybacks would be beneficial to shareholders.