(Reuters) -China’s Tencent Music said its mainstay social entertainment services business shrank in the fourth quarter, overshadowing the company’s in-line results and sending its shares down more than 9% in extended trading.
While most of Tencent Music’s users are in its music streaming unit, social entertainment services including karaoke platforms where users can live stream concerts and shows are its biggest revenue drivers.
Revenue from social entertainment services and others fell 15.2% to 4.73 billion yuan ($742 million), while paying users in the social entertainment category slumped 16.7%.
The weakness was wrought by stiff competition from rivals and the changing macro environment, Executive Chairman Cussion Pang said in a statement on Monday.
A resumption of in-person events in the quarter after COVID-19 receded in the country was expected to weigh on the company’s results, according to analysts.
The results come against the backdrop of China’s intense regulatory crackdown on local tech firms and threats of U.S. penalties if Beijing supports Moscow in its invasion of Ukraine.
In a bright spot, Tencent Music’s online music services business posted revenue growth of 4.3%. Total revenue of the Tencent Holdings-controlled company fell 8.7% to 7.61 billion yuan, in line with market estimates, according to Refinitiv data.
Excluding items, the company earned 0.50 yuan per ADS, meeting analysts’ expectations.
($1 = 6.36 Chinese yuan renminbi)
(Reporting by Yuvraj Malik in Bengaluru; Editing by Devika Syamnath)
