TENCENT TEMPERATURE TENDERS

TENCENT under pressure to step up its game as regulatory restrictions bite and bite.

FOUNDED in 1998, Shenzhen based Tencent enjoyed uninterrupted growth from when it went public in 2004 until this year.

Its shares have surged more than 88 times since IPO, and its market value hit a peak of $578 billion in January before crashing to $380 billion now.

ACCORDING to exchange fillings, Tencent's investments in listed and unlisted associates rose to a record 152.8 billion yuan [$22.23 billion] at the end of June.

Share of profit of associates and joint ventures increased by 206 percent year-on-year to 1.5 billion yuan.

At the same time the company's net debt increased to 35 billion yuan in the second quarter. That compares with net cash of 21 billion yuan in June last year.

The company said the shift to a net debt position this year was mainly due to increased strategic investments.

''The strategic investment team of Tencent should  focus on generating synergy with its core business and shaping up a coherent narrative for expansion,'' said  Charlie Chai, a Shanghai-based analyst with 86Research.

''So far its investments are not creating much shareholder value.''

The company's biggest  moneymaker is gaming. However, its most popular game this year is   PlayerUnknown's Battlegrounds Mobile  [PBUG Mobile], and  Chinese authorities have yet to approve the  in-game purchase that allows Tencent  to make money.

Acknowledging there is ''no clarity'' on when Beijing might remove regulatory blocks,  Tencent  management said last month it will try to generate more revenue outside China from-

 PBUG Mobile  and Arena of Value, the overeseas version of its top grossing game, Honour of Kings. [Agencies]