Tencent Music Entertainment missed estimates for quarterly revenue on Tuesday, as Beijing’s crackdown on online gambling continues to impact its social entertainment segment.
U.S.-listed shares of the company fell 5.6% in premarket trading.
The China-based company had removed certain live-streaming features in August last year to comply with anti-gambling regulations.
Revenue from the company’s social entertainment services business, which includes karaoke app WeSing and live concert platform Kuwo Music, fell 23.9% in the third quarter.
But the impact was largely countered by a 20.4% rise in revenue at its online music unit, after paying users increased 15.5% to 119 million.
Tencent Music‘s premium Super VIP (SVIP) membership, which combines long-form audio content, online karaoke services and high-quality sound, has gained significant traction among users.
The company’s revenue rose 6.8% over the year earlier to 7.02 billion yuan ($970.23 million) in the third quarter, but narrowly missed analysts’ average estimate of 7.04 billion yuan, according to data compiled by LSEG.
Reuters
