...March 24, 2022 HONG KONG (S&P Global Ratings) March 24, 2022--Tencent Holdings Ltd. is not completely out of the woods. The outlook for the China-based technology and entertainment conglomerate over the next 12 months remains clouded by regulatory headwinds and China's economic slowdown. The country's leading internet gaming company is also stepping up strategic initiatives, which could dilute its profit margins and modestly increase its debt leverage in 2022. This would slightly reduce its sizable buffer on the rating (A+/Stable/--). Domestic games revenue has been weak, stemming from a slowdown in new game content. Tencent has been implementing game restrictions for minors under regulatory pressure, on top of grappling with a halt in new game approvals. Additionally, the company's advertising revenue could be hit harder than that of competitors, given its larger exposure to advertisers also disrupted by new regulations. For example, educational service providers at one point accounted...
