Tencent had tumbled 23% in July as of Wed, set for its worst month ever after erasing about US$170 billion of market value.
Tencent had tumbled 23% in July as of Wednesday, set for its worst month ever after erasing about US$170 billion of market value. — China’s unprecedented crackdown on its technology industry has turned Tencent Holdings Ltd. from a market darling into the world’s biggest stock loser this month.
Tencent’s shares rebounded by 7.1% on Thursday morning, tracking broader gains in Chinese stocks after Beijing intensified efforts to alleviate concerns about its crackdown on the private education industry. “I don’t see an end to the regulatory crackdown. Data security is a top priority to policy makers in the coming years. It’s a new normal,” said Paul Pong, managing director at Pegasus Fund Managers Ltd. “Valuations will have to be adjusted to cope with that, especially for technology giants like Tencent.”
Despite concerns about further punitive measures from regulators, the company’s stock is starting to look cheap and most analysts have refrained from cutting their price targets: Among the 68 analysts who have a rating on Tencent, 62 still recommend the stock as a “buy.” The average target price among analysts is HK$736.3, representing a 65% premium over Wednesday’s close of HK$447.2, Bloomberg data shows.At HK$447.2, the stock was trading at 22.
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