Booth of Tencent Cloud at the China International Big Data Industry Expo 2021 in Guiyang, Southwest China's Guizhou Province on May 27, 2021 Photo: Chi Jingyi/GT

Chinese internet giant Tencent posted a quarterly decline in net profit for the third quarter as it adapted to regulatory and macroeconomic changes, its financial report showed on Wednesday. 

Tencent's revenues were up 3 percent to 142.4 billion yuan ($22.29 billion) for the third quarter on a quarterly basis, while its net profit fell by 7 percent to 39.5 billion yuan during the quarter, which was still higher than market expectations. The company's earnings, not defined in International Financial Reporting Standards (IFRS), also declined 7 percent to 31.8 billion yuan for the quarter.

By the end of September, the combined monthly active user accounts of Tencent's WeChat and Weixin - WeChat's Chinese version - jumped 4.1 percent year-on-year to 1.26 billion.

The internet sector including the domestic gaming sector had to face new regulatory and macroeconomic developments over the past quarter, Tencent said in its quarterly disclosure filed with the Hong Kong stock exchange. The firm promised to "proactively embrace the new regulatory environment, which we believe should contribute to a more sustainable development path for the industry."

Since September 1, Tencent has implemented new measures in accordance with the latest rules on restricting minors' game time and spending in the country. Minors accounted for 0.7 percent of Tencent's domestic game time during September, down substantially from 6.4 percent the year before, according to the company.

As measured by domestic games' gross receipts, minors represented 1.1 percent in September, down from the prior year's reading of 4.8 percent. 

Tencent's shares in the Hong Kong market finished up 4.22 percent on Wednesday, outperforming a 0.74 percent gain in the benchmark Hang Seng Index. Its shares have shed 14 percent year-to-date, however.

Behind the challenge confronting short-term earnings, Tencent has been continuing to ramp up commitments to social values and frontier technologies, taking advantage of sci-tech to prop up real economic development, read a company statement sent to the Global Times on Wednesday. 

In a sign of Tencent's venture beyond its traditional gaming and social networking strength, mirroring a national drive for tech self-sufficiency, Tang Daosheng, a senior executive vice president of Tencent, took the wraps off the company's chip development last week.

Tencent has made progress on three self-developed chips, according to Tao, including an artificial intelligent (AI) chip for inference, another for video transcoding and an intelligent network chip.

Research and development expenses hit 13.73 billion yuan during the third quarter, the highest quarterly number this year. In the first three quarters of the year, Tencent's cumulative R&D spending soared 36 percent year-on-year to 37.86 billion yuan.

The company pledged to explore a new path to development while actively embracing regulations, according to the statement. 

Global Times