Tencent’s second-quarter sales may rise 47 per cent, bolstered by blockbuster mobile games
The world’s largest video games company by revenue expected to post solid first-half earnings, as analysts remain bullish on its rising share price
Tencent Holdings had plenty to cheer about early last Wednesday when its shares soared in Hong Kong to an all-time high of HK$328.60, a week ahead of the video games and social media titan’s interim earnings announcement.
Most of those gains, however, were quickly wiped out on Friday after China’s online watchdog launched an investigation into Tencent’s WeChat, Weibo Corp’s Twitter-like service and Baidu’s Tieba communications platform for possible violations of the country’s new Cybersecurity Law. Its shares lost 5 per cent to HK$310.60 by the close of trading.
But most remain unfazed and bullish on Tencent, based on recent experience.
Those shares also got hammered early last month, when nearly HK$136 billion of the company’s market value was wiped out, after the People’s Daily newspaper criticised its popular smartphone game Honour of Kings as a “poison” and “drug”, especially harmful to young players.
Shenzhen-based Tencent, the world’s largest games company by revenue, responded by imposing a series of controls to limit the playing time of gamers below 12-years-old and those up to 18 years old.
Soon after that, Tencent’s shares started a steady ascent, while analysts forecast a solid quarter ended June 30, which will have bolstered the company’s interim financials.