Tencent Holdings Ltd (騰訊) founder Pony Ma (馬化騰) — the second-richest man in China — has met with Chinese antitrust regulators and agreed that his firm would be “as compliant as possible,” after rival technology giant Alibaba Group Holding Ltd (阿里巴巴) was battered by legal woes.
Tencent, which owns WeChat and a lucrative gaming empire, is the latest tech conglomerate to fall in the crosshairs of the regulators.
They have launched a blitz on apparent anticompetitive practices, threatening to slice up supersized firms whose reach now stretches into the daily finances of the Chinese public.
Photo: Reuters
Last week, they summoned 11 tech firms for talks on cybersecurity.
Ma said that he would “actively cooperate with regulatory authorities and be as compliant as possible” during a news briefing on Wednesday on Tencent’s annual results, Chinese financial news Web site Yicai reported.
Tencent president and chief executive director Martin Lau (劉熾平) also said that he had met with the Chinese government several times to discuss antitrust efforts and hoped to create a “healthy environment” to foster innovation.
Lau acknowledged that companies like Tencent tread a fine line between public duty and profit motive as they get larger, but the “boring answer” was to remain compliant and stay in touch with the government.
Asked whether Tencent’s core gaming and entertainment businesses might attract antitrust regulators’ attention, company executives pointed to the sheer number of competitors.
That was in contrast with a quarter earlier, when they stressed that new antitrust rules focused more on transaction-based platforms than on Tencent’s entertainment businesses.
“We have always been very focused on compliance, and we will continue to operate strictly in compliance with the rules and regulations,” Lau told reporters on a conference call.
Any requirements to form a financial holding company would not have an impact on its business, he added.
Tencent’s attempt to allay investor concerns over regulatory scrutiny comes after it posted revenue growth that barely met expectations.
Sales rose 26 percent to 133.7 billion yuan (US$20.46 billion) in the fourth quarter last year, versus a 133.1 billion yuan average forecast.
Net income was 59.3 billion yuan, with one-time gains contributing over half of its profit. That compared with the 32.9 billion yuan projected.
It is unclear how far Beijing intends to go in its bid to rein in Tencent and other technology companies.
In the short term, investors will likely focus more on how the world’s largest game publisher could sustain a COVID-19 pandemic-induced entertainment boom, while delving deeper into newer businesses like advertising and payments.
The company’s shares slumped 5 percent from US$80.93 to US$76.81 by close of trading on Wednesday.
Additional reporting by Bloomberg
Three experts in the high technology industry have said that US President Donald Trump’s pledge to impose higher tariffs on Taiwanese semiconductors is part of an effort to force Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) to the negotiating table. In a speech to Republicans on Jan. 27, Trump said he intends to impose tariffs on Taiwan to bring chip production to the US. “The incentive is going to be they’re not going to want to pay a 25, 50 or even a 100 percent tax,” he said. Darson Chiu (邱達生), an economics professor at Taichung-based Tunghai University and director-general of
‘LEGACY CHIPS’: Chinese companies have dramatically increased mature chip production capacity, but the West’s drive for secure supply chains offers a lifeline for Taiwan When Powerchip Technology Corp (力晶科技) entered a deal with the eastern Chinese city of Hefei in 2015 to set up a new chip foundry, it hoped the move would help provide better access to the promising Chinese market. However, nine years later, that Chinese foundry, Nexchip Semiconductor Corp (合晶集成), has become one of its biggest rivals in the legacy chip space, leveraging steep discounts after Beijing’s localization call forced Powerchip to give up the once-lucrative business making integrated circuits for Chinese flat panels. Nexchip is among Chinese foundries quickly winning market share in the crucial US$56.3 billion industry of so-called legacy
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday held its first board of directors meeting in the US, at which it did not unveil any new US investments despite mounting tariff threats from US President Donald Trump. Trump has threatened to impose 100 percent tariffs on Taiwan-made chips, prompting market speculation that TSMC might consider boosting its chip capacity in the US or ramping up production of advanced chips such as those using a 2-nanometer technology process at its Arizona fabs ahead of schedule. Speculation also swirled that the chipmaker might consider building its own advanced packaging capacity in the US as part
A move by US President Donald Trump to slap a 25 percent tariff on all steel imports is expected to place Taiwan-made steel, which already has a 25 percent tariff, on an equal footing, the Taiwan Steel & Iron Industries Association said yesterday. Speaking with CNA, association chairman Hwang Chien-chih (黃建智) said such an equal footing is expected to boost Taiwan’s competitive edge against other countries in the US market, describing the tariffs as "positive" for Taiwanese steel exporters. On Monday, Trump signed two executive orders imposing the new metal tariffs on imported steel and aluminum with no exceptions and exemptions, effective