The Zhitong Finance App learned that Tencent Holdings (00700) opened more than 3% lower after the results. As of press release, it fell 3.29% to HK$446.4, with a turnover of HK$697 million.

According to the news, on August 12, Tencent Holdings released financial results for the second quarter of 2026. In the second quarter, Tencent's revenue was 204.785 billion yuan, up 11% year on year, up 4% month on month; net profit increased 0.7% year on year to 56 billion yuan, lower than market expectations; non-IFRS operating profit was 75.636 billion yuan, up 9% year on year, flat month on month. In the first half of this year, Tencent's revenue was 401,243 billion yuan, up 10% year on year; non-IFRS operating profit was 151,263 billion yuan, up 9% year on year.

Notably, the upfront investment in AI infrastructure “smashed” cash flow into a negative figure. Tencent's capital expenditure in the second quarter reached 52.8 billion yuan, up 65% from 31.9 billion yuan in the first quarter; free cash flow turned negative to -13.8 billion yuan. This is also the first time since 2005 that Tencent's free cash flow is negative. The company said that net cash dropped from 146.9 billion yuan in the first quarter to 58.1 billion yuan if computing power advance payments were excluded.

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