HONG KONG (Aug 16): Shares of Chinese technology giant Tencent Holdings plunged on Thursday after it reported its first quarterly profit fall in nearly 13 years and said it did not know whether it would get Chinese approval for its most popular game.
Chinese censors' sometimes abrupt and haphazard regulatory measures have clouded the outlook for the world's largest market for mobile games in a country where the government can make or break a business.
Tencent said late on Wednesday the biggest issue facing the company before it could return to rapid revenue growth was to gain regulatory approval to start charging for its PlayerUnknowns' Battlegrounds (PUBG) video game in China.
While several brokerages cut their price target for Tencent after its earnings, analysts were broadly upbeat on the outlook.
"Fundamentally, the business is as strong as it has ever been, in our view, and management says that it is working on various initiatives to reinvigorate growth as soon as possible," Renaissance Capital said in a research note.
Tencent's shares, which have dropped 13.5% so far this week, fell as much as 5% in early trade to HK$319, their lowest level in a year. Shares of South Africa's Naspers, which owns a 31% stake in Tencent, slid 8% after the results were announced on Wednesday.
Beijing's move to halt approvals for game licences has hit shares of video game companies across Asia and in the United States.
Tencent's profit decline and caution over the gaming business further hit tech shares in Asia on Thursday.
Shares of chipmaker Samsung Electronics Co fell nearly 2%, SK Hynix dropped 3.4%, while Japan's Capcom, which developed Tencent's blockbuster game Monster Hunter:World, fell 3%.