China's technology giants expect a slump in profits

China's biggest-listed companies Tencent and Alibaba are expected to report a fall in profits and slowing revenue growth in the July-September quarter, hurt by the year-long regulatory crackdown that has upended its technology industry. Beijing has reasserted control over its once-freewheeling internet sector, punishing well-known names for engaging in what were previously considered regular market practices and drafting new rules to change how they compete and engage users. "We believe the financial impact of regulatory headwinds in China will be reflected in (third quarter) earnings and (fourth quarter) guidance," KGI Asia analysts said in a note last month. Tencent Holdings Ltd – the country's largest firm by market value and its first Big Tech name to report earnings on Wednesday – is expected to post a 12 percent fall in quarterly profit, its first drop in two years, according to Refinitiv data. The gaming giant's revenue is expected to rise 16.4 percent, the slowest pace since the first quarter of 2019, after the government imposed new limits on the amount of time minors can spend playing video games.