After three straight years of decline, Chinese tech company Tencent is poised for gains in 2024. The stock is up more than 3% for the year so far, in contrast with a decline of more than 4% in Hong Kong’s main Hang Seng Index. Tencent, largely known for its gaming and social media businesses, is the biggest stock in the index with a market capitalization of more than $350 billion. The first quarter should “mark the trough” in Tencent’s games business, Morgan Stanley equity analyst Gary Yu and a team said in a report on April 14. “We expect games growth to be down 4% YoY (vs cons down 3% YoY) mainly due to soft domestic growth. That said, our previous expectation of 2Q seeing an inflection point remains intact.” The firm is overweight on Tencent shares, with a price target of 400 Hong Kong dollars ($51). That’s more than 30% above where the stock closed Friday. Chinese authorities resumed approvals of Tencent’s games in late 2022 after a freeze of more than a year. When asked in late March about the risk of new restrictions, management said that regulators have made it clear they intend to “provide a healthy environment for growing the industry rather than constraining the industry.” That’s according to a FactSet transcript of an earnings c …
Article Attribution | Read More at Article Source
[mwai_chat context=”Let’s have a discussion about this article:nnAfter three straight years of decline, Chinese tech company Tencent is poised for gains in 2024. The stock is up more than 3% for the year so far, in contrast with a decline of more than 4% in Hong Kong’s main Hang Seng Index. Tencent, largely known for its gaming and social media businesses, is the biggest stock in the index with a market capitalization of more than $350 billion. The first quarter should “mark the trough” in Tencent’s games business, Morgan Stanley equity analyst Gary Yu and a team said in a report on April 14. “We expect games growth to be down 4% YoY (vs cons down 3% YoY) mainly due to soft domestic growth. That said, our previous expectation of 2Q seeing an inflection point remains intact.” The firm is overweight on Tencent shares, with a price target of 400 Hong Kong dollars ($51). That’s more than 30% above where the stock closed Friday. Chinese authorities resumed approvals of Tencent’s games in late 2022 after a freeze of more than a year. When asked in late March about the risk of new restrictions, management said that regulators have made it clear they intend to “provide a healthy environment for growing the industry rather than constraining the industry.” That’s according to a FactSet transcript of an earnings c …nnDiscussion:nn” ai_name=”RocketNews AI: ” start_sentence=”Can I tell you more about this article?” text_input_placeholder=”Type ‘Yes'”]
