Tencent Q3 hurt by weak Chinese economy, regulations; will give Meituan stake as dividend
Michael Vi

Chinese internet giant Tencent (OTCPK:TCEHY) reported third-quarter results on Wednesday that missed expectations due to the slowing Chinese economy and regulatory crackdowns, with the company adding it would distribute its $20.3B stake in Meituan to shareholders as a dividend.
For the period ending September 30, Tencent (OTCPK:TCEHY) said its revenue fell 1.6% year-over-year to $19.8B (RMB140.09B) and its adjusted EBITDA declined 1% over the same time frame to $6.86B (RMB48.6B).
The company, which is in the midst of conducting a new round of layoffs, said its capital expenditures fell sharply to RMB2.4B, down 66% year-over-year.
"During the third quarter, we started to benefit from the adjustments that we have made to reposition ourselves for a new industry paradigm," Tencent Chairman and CEO Ma Huateng said in a statement. 
The CEO added that Tencent (OTCPK:TCEHY) started to put ads in its video accounts during the period and the continued execution of "cost efficiency initiatives which re-focused us on core activities and controlled our cost growth."
Free cash flow during the period was $3.9B or RMB27.6B, up 15% year-over-year.
In addition to the financial results, Tencent (OTCPK:TCEHY) said it would give its $20.3B stake in Chinese food delivery company Meituan to shareholders. Tencent owns approximately 17% of the firm.
Tencent (OTCPK:TCEHY) sold off the vast majority of its stake in JD.com (JD) in December 2021. The company also owns stakes in a number of other companies, including Pinduoduo (PDD), Tesla (TSLA) and others.
Last month, Tencent Games (OTCPK:TCEHY) subsidiary Level Infinite collaborated with Swarmio Media (OTCQB:SWMIF) and Globe Telecom (OTCPK:GTMEF) to launch two exclusive gaming tournaments in the Philippines.