...November 11, 2021 HONG KONG (S&P Global Ratings) Nov. 11, 2021--S&P Global Ratings said today that a longer slump in advertising and online games is credit negative for Tencent Holdings Ltd. (A+/Stable/--). However, the China-based internet company still has many strengths including a conservative balance sheet and strong operating cash flow. The gaming term "meta"--or Most Effective Tactics Available--is applicable to the abrupt strategy adjustments Chinese internet companies need to execute amid a changing regulatory environment. Our base case for Tencent's 2021 revenue growth and profit margins remains largely unchanged, though revenue growth could be at the lower-end of our 15%-20% range. However, revenue growth and profitability for 2022 could be materially lower, with high-single digit growth and EBITDA margins at the lower range of our 26%-30% estimate. Further, investments, acquisitions, and shareholder renumeration could increase Tencent's adjusted debt-to-EBITDA ratio to 0.6x-0.8x...
