Tencent Holdings Ltd. suggested Donald Trump’s executive order to ban its WeChat messaging service may have a narrow impact on its business if it applies only outside of China.
Tencent executives emphasized during comments after the company reported earnings the distinction between WeChat, the service used outside China, and Weixin, a similar app that is used inside the country. Trump’s order named the former specifically.
The distinction is critical because Tencent gets the vast majority of its revenue from within China. If the messaging service continues without disruption within the country, the effect on Tencent’s business would likely be fairly modest.
”The executive order is focused on WeChat in the United States and not other businesses in the U.S.,” John Lo, chief financial officer said on a call with investors, adding that he couldn’t speculate further. “We are in the process of seeking further clarification from bipartisan parties in the U.S.”
The comments came after Tencent boosted revenue at the fastest pace in two years and reported profit that beat the highest analyst estimates. Sales rose 29% to 114.9 billion yuan ($16.5 billion) in the three months ended June, while net income increased to 33.1 billion yuan.
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