UpdateChinese government broadband plan lifts Tencent and Lenovo shares

The share prices of mainland Chinese mobile commerce titan Tencent and personal computer giant Lenovo rose yesterday after the central government announced plans for better and cheaper broadband connectivity in rural China.

Tencent was the most heavily traded Hong Kong stock yesterday, with a trading value of HK$4.18 billion. Tencent's share price rose as much as 5 per cent before closing up 2.9 per cent at HK$161.30.

It announced its first-quarter results after the market closed on Wednesday, with advertising revenue jumping 131 per cent to 2.7 billion yuan, above HSBC's estimates, while total revenue grew 22 per cent to 22.4 billion yuan, slightly below HSBC's estimates. Macquarie, HSBC and Barclays all had a buy rating on Tencent.

Lenovo's share price rose as much as 3.3 per cent before closing up 2.1 per cent at HK$13.72.

On Wednesday, the State Council published a white paper announcing faster and cheaper broadband as part of the government's plan to improve online connectivity in rural China.

The biggest gainers on the Shanghai Composite Index - hitting the 10 per cent daily limit - belonged to different industries. Tianjin Songjiang is a property developer, while Sanlian Commercial is a retailer and Sichuan Mingxing Electric Power is an electric power company.

"In this type of environment, investors focus on stock picking, with stocks in the same sector having very different performance," said Gerry Alfonso, a director of Shenwan Hongyuan Securities.