Tencent reports unexpected decline in profits

Tencent shares were in the red on Wednesday as lower investment gains in the second quarter led to a drop in profits at Asia's most valuable tech firm.

Tencent saw revenue increase 30% in the second quarter to RMB 73.7bn (£8.38bn) but net profit dipped 2% year-on-year to RMB 17.9bn, roughly £2.03bn.

The fall marks the end of a growth streak more than a decade-long and comes less than a year after Tencent was crowned Asia's first $500bn tech business.

While Tencent was upbeat about the future, its outlook was overshadowed by a slowdown in mobile gaming and worries that regulatory changes would cause further setbacks after the sale of the Chinese giant's blockbuster game 'Monster Hunter: World' was banned at its debut event.

Tencent claimed it would now turn its focus on reinvigorating its mobile game revenue growth by extracting more value from existing popular titles, launching more role-playing games and publishing more of its Chinese exclusives outside of its home country.

"We view our internally developed games Arena of Valor and PUBG MOBILE, as highly suitable for expansion to gamers outside China," Tencent said.

Elsewhere, Tencent revealed that payment and related financial services, as well as its cloud services, helped the firm's 'others' business category turn in an 81% revenue increase to RMB 17.5bn (£2bn).

Tencent's net other gains dropped 51% in the quarter to RMB 2.5bn (£290m), principally due to a decline in gains in investment disposals.

As of 1410 BST, Tencent shares had lost 3.61% to HKD 336 each.