After the divestment, Meituan will no longer be accounted as an associate, Tencent said.

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Pony Ma Huateng, Tencent chairman and CEO, said the Meituan stake had generated significant returns. “Our resilient businesses, diversified cash flows, sizeable cash balance and substantial investment portfolio enable us to invest in strategic growth areas and innovation, while at the same time returning capital to shareholders,” he said in a statement on Wednesday

Tencent president Martin Lau Chi Ping said in an analyst conference call that “we have made a very big financial gain from it [Meituan] already. That’s why we would like to allow our shareholders to start making their own decisions about what to do with the shares”.

Ma added that the company benefited in the third quarter from adjustments it has made. “We activated in-feed advertisements in Video Accounts, achieved breakthroughs in international games publishing, and executed cost efficiency initiatives which refocused us on core activities and controlled our cost growth.”

With reference to Video Accounts, Lau said “revenue has been ramping up fast since we made additional inventory available … We are on track to exceed 1 billion yuan in quarterly revenue in the fourth quarter”. With regard to overall ad revenue, Lau said “we are on track to resume year-on-year growth in late 2022”.

The third quarter results came as Tencent continues to face macroeconomic headwinds under the country’s Covid-19 control policies, and as it looks for new growth drivers for its business. Its share price has been on a roller-coaster ride, reaching a historic low since 2018 before rebounding this month.

Tencent headcount down 1.7 per cent in the third quarter amid economic headwinds

Tencent shares in Hong Kong rose 2.2 per cent on Wednesday ahead of the earnings announcement, closing at HK$294.4.

Addressing the issue of job cuts, Lau said after a “rationalisation of non core and underperforming businesses, we optimised our workforce and controlled staff costs at the end of the third quarter”.

In September the company pulled the plug on its WeGame app, the video game portal that was Tencent’s answer to Steam, due to “changes in business development strategy”. In the same month, Tencent was granted its first gaming license in 15 months, but its core gaming business faced a slowing domestic economy, shrinking player base and ongoing regulatory scrutiny.

Chief strategy officer James Mitchell said in the conference call that any improvement in video gaming revenue would depend on the issuance of new licences and the macroeconomic environment. International game revenue rose 3 per cent to 11.7 billion yuan in the third quarter, while domestic game revenue fell 7 per cent to 31.2 billion yuan.

China has cracked down on gaming content in recent years, introduced measures to protect minors and slowed the pace of new licence approvals. The gaming regulator has not released any new approvals since September.

Lau said in the call that “the overall regulatory situation is trending towards a more supportive environment”.

The number of monthly active users for WeChat reached 1.3 billion in the third quarter.

WeChat’s user base “represents strong long-term growth potential via ramping up monetisation on its Video Accounts and mini programs as well as other social segments, where a large user base is the key value proposition,” Tsz Wang Tam, analyst at DBS, wrote in a recent note. “We are more optimistic on the long-term growth outlook of the WeChat ecosystem despite near-term macro challenges.”