Is now a good time to buy Tencent stock? Momentum in online gaming, advertising would suggest so
- The company’s stock has turned a corner this year and was up almost 8 per cent at the close on Friday
- Analysts set average 12-month target price of HK$430.3, 27 per cent up from Friday’s close
Tencent Holdings, largely unknown outside China, is the world’s largest gaming company. And last year, for the first time since its listing in 2004, its stock recorded its biggest yearly crash. But its shares have been on the rise in 2019, and with half-year results due on Wednesday, is now the time for investors to buy in?
Founded in 1998, it has a market cap of about HK$3 trillion. It runs WeChat, China’s most popular messaging app, and has toes dipped in payment systems as well as advertising, among other sectors. It was reported recently that the Shenzhen-based company was in talks to acquire a 10 per cent stake in Universal Music Group – the label behind Lady Gaga, Ariana Grande and Bruce Springsteen – from French conglomerate Vivendi for US$3.36 billion.
Since its listing in Hong Kong, the company’s share price has risen steadily. In 2017, it surged by a dramatic 115.9 per cent and reached an all-time high of HK$476.6 in late January 2018.
During this period, it also became the first Chinese technology company to crack the US$500-billion threshold in terms of market value, in November 2017, and posted a 74 per cent rise in net profit to 71.5 billion yuan (US$10.9 billion).
But it took a battering last year and shed 23 per cent through to the end of December.
