Tencent shares slide for 2nd straight day to hit lowest since Jul 7

 

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

 

 

Tencent shares decline further in Hong Kong, falling by up to 2.8% to hit HK$327, the lowest since July 7, after sliding 4.6% one day earlier. 

As of Tuesday, mainland Chinese investors sold a net about HK$2.77 billion worth of Tencent stocks in three consecutive days via the Mainland Hong Kong Stock Connect Scheme.

Tencent’s major shareholder Prosus has said that its stake in the tech giant will drop by 2 – 3 percentage points per year and by the end of 2023, its stake will drop to around 24% – 25%. Currently, Prosus holds about 26% stake in Tencent, worth about $112 billion and the investor has been slowly offloading the stocks to fund its stock repurchase plan.

Tencent is scheduled to released Q2 earnings on August 16. China Merchants Securities said in a note that Tencent’s Q2 revenue is expected to grow by 14% from a year earlier, with revenue from value-added services, advertizing and fintech expected to grow by 10%, 22% and 17%, respectively. Tencent’s non-IFRS net profit for Q2 is expected to grow by 31% to 36.8 billion yuan, with a net profit margin of 24.1%, the broker estimated.

The broker is optimistic about Tencent’s revenue recovery and profit margin expansion, but noted that considering the company’s investment in content, products and AI, the growth will be moderate. It maintains the target price for Tencent at Hk$426, kept a Buy rating.