JPMorgan expects Tencent to post solid Q2 results, believes recent penalty to bolster its fintech operation

 

>>REAL-TIME UPDATES IN THE WIRE. CLICK HERE<<<

 

 

The 12% slump in the share price of Tencent over the past three months was likely attributable to investors’ profit-taking, JPMorgan said in a note. 

The recent announcement from Chinese regulatory authority on the financial penalties for the group’s fintech subsidiary will not only bolster investors’ confidence on the growth outlook of Tencent’s fintech segment, but also pave way for the tech giant to rejuvenate its fintech operation under a normalized regulatory environment, it said.

JPMorgan forecast solid Q2 results from Tencent, expecting its total revenue/ online game revenue/ adjusted net profit to grow by 15%/ 10.3%/ 33% year over year to 154 billion/ 46.879 billion/ 37.41 billion yuan. 

The rating on the stock was kept at Overweight, with a target price of HK$440. 

Tencent stocks gained 1.86% to close at HK$340 on Wednesday.