Tencent revenue growth slows in Q1, despite profit increase

Chinese internet giant Tencent on Tuesday announced a six percent increase in quarterly revenue, the weakest growth recorded by the firm in over a year as it continues its push into AI.

The Shenzhen-based company is one of the most valuable players in China's tech industry, operating the country's ubiquitous "super-app" WeChat in addition to diverse offerings across gaming, cloud computing, content streaming and artificial intelligence.

Tencent achieved total revenue of just over $22 billion in the three-month period ending March 31, a filing to the Hong Kong Stock Exchange showed, up six percent from the same period last year.

The revenue growth figure was consistent with an average of analyst estimates compiled by Bloomberg, which had also forecast an increase of six percent in the quarter.

Quarter-one revenue growth was down slightly from the seven percent increase posted in the final quarter of 2023, and the lowest since the final quarter of 2022.

The latest earnings report comes two months after Tencent posted its lowest annual profit since 2019, due in part to stagnating gaming revenue in the final quarter of 2023.

Decades of meteoric growth that turned China's tech industry into one of the most dynamic in the world came to an abrupt halt in 2020, when Beijing introduced more stringent oversight measures.

Authorities have since relaxed their approach to regulating the vital domestic tech sector as broader concerns about the health of China's economy mount.

Tencent and several of its Chinese tech industry peers -- including Huawei, Baidu and Alibaba -- have recently been eyeing the promising field of AI for the future development of their businesses.

Last September, Tencent unveiled Hunyuan, an AI-powered chatbot intended to compete with the US's ChatGPT, whose services are not accessible in China.

In a promising sign for the firm, net profit in the period totalled $5.8 billion, up 62 percent year-on-year, the filing also showed.

The profit growth was the strongest recorded by Tencent in any three months since the first quarter of 2021.