Tencent CEO and Chairman Pony Ma Huateng attends Tencent’s 2018 Annual Results Announcement on March 21, 2019 in Hong Kong.
China News Service | Visual China Group | Getty Images
The stock later pared some losses and was down around 2.5% at 11:42 a.m. HK/SIN. That equated to around $10.5 billion of value being wiped out.
Revenue rose 21% year-on-year to 88.82 billion yuan ($12.92 billion, according to the exchange rate published in the earnings statement). That missed market estimates. However, profit attributable to shareholders beat analyst forecasts, rising 35% year-on-year to 24.14 billion yuan.
The company’s gaming division returned to growth, posting revenue of 27.3 billion yuan, up 8% year-on-year. Mobile games in particular were up 26%.
That was welcomed given that the Chinese government froze video game approvals last year, hurting Tencent’s business badly and wiping billions off the company’s market capitalization. Games need to be approved by the Chinese regulators before they can be released and monetized.
Gaming is Tencent’s biggest division, accounting for around 30% of revenue in the second quarter.
Another bright spot was the company’s financial technology and business services division, which includes revenues from WeChat Pay, Tencent’s wealth management product and cloud computing. That business was up 37% year-on-year to 22.9 billion yuan.
But management struck a note of caution for a number of areas. One was the advertising business, which saw a slowdown. Headwinds in that area are likely to continue, according to James Mitchell, chief strategy officer at Tencent.
“Our assumption is that the macro environment will remain difficult for the rest of the year and that the situation of the heavy supply of advertising inventory will continue for the rest of the year and potentially into next year,” he said on the company’s earnings call on Wednesday.
Tencent also reined in spending in the second quarter. Capital expenditure was down 38% compared to the year-ago period. Cash flow used for investing also dropped sharply in the first half of the year compared with the same period in 2018.
Mitchell said that was because the first half of 2018 had an “unusually rapid pace” of investment, but he did say the company was being more “measured” in how it deploys capital.
UK pork firms see 2020 sales boost as African Swine Fever grips China
Pigs in their pen at a farm on the outskirts of Chengdu in China’s south west Sichuan province, on August 2, 2005.
Peter Parks | AFP | Getty Images
U.K. pork exporters are forecasting high demand from China to continue into 2020 after the country was hit particularly hard by a virus that has been killing pigs around the world.
Pork is by far the most popular meat in China, but domestic producers have been hit hard by African Swine Fever (ASF).
Beijing authorities said Monday that efforts to stabilize prices have achieved results. China has been drawing down on its frozen pork inventories as well as fast-tracking trade deals to raise the level of imports.
In the first eight months of 2019, Britain shipped more than 45,000 metric tons of pork to China according to industry press, almost double 2018 volumes. This has made China the U.K.’s biggest customer of pig meat.
In the last few month, six new UK plants have approved to export pig trotters, a popular Chinese delicacy.
The UK’s biggest pork producer, Tulip, generates more than £1 billion ($1.34 bn) in total revenue each year. For China, Tulip primarily exports pig heads, trotters, hind feet and offal. Belly, back and shoulder are also shipped.
Agricultural Director at Tulip, Andrew Saunders, told CNBC in an email Friday that its abattoirs that export to China have had an increase in sales of around 80% year on year.
Saunders added that said Chinese demand growth had been happening since August 2018 and China had now witnessed a 25% reduction of its domestic pork production due to ASF.
On whether the high prices were likely to persist Saunders said: “We expect this to continue into 2020.”
In November, rival U.K. processor Cranswick reported a 7.1% rise in six-month revenue “underpinned by a very strong performance in our Far East export markets.”
It added that African Swine Fever in far eastern export markets had “created the opportunity to increase sales into this region on commercially favorable term.”
Chinese pork demand typically peaks in late January around the celebration of the Lunar New Year. Fears exists that China won’t have enough pig meat to satisfy demand next year.
But commodity specialists at Rabobank have seen signs that the Chinese consumer was prepared to avoid pork if the prices were too high. It said in June that Chinese pork consumption had dropped by 10% to 15% across 2019, driven by food safety concerns.
It noted that while lowering pork consumption and the release of healthy frozen pork had restricted rises to Chinese pork and hog prices, other substitute meats prices were on the rise.
Rabobank said Chinese canteens at schools or factories had switched to poultry and Chicken breast meat prices had risen by 44% percent year-on-year by May. The bank forecasts that for 2020, there will be less pork produced but other markets such as beef and chicken will grow.
Now watch: US pork prices surge on Chinese demand
China TV network cancels soccer broadcast after player criticizes country
China’s state-run broadcaster CCTV canceled the broadcast of a soccer game on Sunday after a star player criticized the country’s treatment of Muslims.
The match between England’s Arsenal and Manchester City teams was removed from CCTV’s schedule after Arsenal midfielder Mesut Ozil posted comments on social media about the treatment of Uighur Muslims in China.
On Friday, Ozil, a Turkish-German Muslim, called Uighurs “warriors who resist persecution” and criticized China and the silence of Muslims in response, according to a BBC report.
The Global Times, a Chinese English-language newspaper, called Ozil’s comments “false” and said he had “disappointed Chinese fans and football governing authorities,” via its Twitter account on Sunday.
According to U.S. thinktank the Council on Foreign Relations (CFR), around a million Uighur Muslims have been detained in “re-education” camps in Xinjiang, a province in north west China.
China has described the camps as places for vocational training, but classified documents leaked to news organizations last month revealed a deliberate strategy to lock up ethnic minorities even though they had not committed any crimes, according to an AP report.
Arsenal has sought to distance itself from Ozil’s comments. A Chinese translation of a post on Arsenal’s Weibo account read: “Regarding the remarks released by Mesut Ozil on social media yesterday evening on Beijing time, Arsenal Football Club must make a clear statement here: the content it published is all Ozil personal opinion. Arsenal as a football club has always adhered to the principle of not involving politics.”
Manchester City beat Arsenal 3-0 at Arsenal’s Emirates Stadium in London on Sunday. CCTV broadcast a match between Tottenham Hotspur and the Wolverhampton Wanderers instead.
Arsenal Football Club had not responded to CNBC’s request for comment at the time of publication.
India citizenship law protests spread across campuses
Protesters take part in a demonstration against the Indian government’s Citizen Amendment Bill (CAB) in Guwahati on December 14, 2019.
Protests over a new Indian citizenship law based on religion spread to student campuses on Monday as critics said the Hindu nationalist government was pushing a partisan agenda in conflict with the country’s founding as a secular republic.
Students pelted stones at police who locked up the gates of a college in the northern city of Lucknow to prevent them from taking to the streets. About two dozen students at another college in the city sneaked out to protest.
Anger with Prime Minister Narendra Modi’s government was fuelled by allegations of police brutality at Jamia Millia Islamia university on Sunday, when officers entered the campus in the capital New Delhi and fired tear gas to break up a protest. At least 100 people were wounded.
There were similar scenes at the Aligarh Muslim University in the northern state of Uttar Pradesh, where police also clashed with protesters.
Under the law passed by parliament last week, religious minorities such as Hindus and Christians in neighbouring Muslim-majority Bangladesh, Pakistan and Afghanistan who have settled in India prior to 2015 will have a path to citizenship on grounds they faced persecution in those countries.
Critics say the law, which does not make the same provision for Muslims, weakens India’s secular foundations.
The head of Jamia Millia demanded an investigation into how police were allowed to enter the campus. “It is not expected of the police to enter the university and beat up students,” Najma Akhtar told a news conference.
Students said police fired tear gas and windows were broken in the library. They ducked under desks and switched off the lights as advised by teachers.
Hundreds of people gathered outside the New Delhi police headquarters to protest against alleged police brutality and the detention of students. Police said they acted with restraint.
Rahul Gandhi, the leader of the main opposition Congress party, said the Modi government was dividing up Indian society through the citizenship law and a plan to launch a national citizenship register.
“The best defence against these dirty weapons is peaceful, non-violent Satyagraha,” he said in a tweet referring to the strategy of passive political resistance advocated by independence leader Mahatma Gandhi.
The most violent protests during the past few days took place in the northeastern state of Assam, where mobs torched buildings and train stations, angry the law would help thousands of immigrants from Bangladesh become lawful citizens. At least two people were killed.
Protests were held in Mumbai’s Indian Institute of Technology and Tata Institute of Social Sciences overnight and on Monday and more were planned at Bombay University and in the southern city of Bengaluru later in the day.
Some Bollywood celebrities like actress Konkona Sen Sharma, and directors Mahesh Bhatt and Anubhav Sinha, also criticized the police action on Twitter and called on others to speak up.
“We are with the students! Shame on you @DelhiPolice,” Sen Sharma tweeted.
Modi’s ruling Bharatiya Janata Party denies any religious bias. It says the new law is meant to help minority groups facing persecution in the three nearby Muslim countries.
Modi has said the law has been passed by parliament and there is no going back on it. He told a rally on Sunday the decision was “1000 percent correct”.
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