Close Menu
TechCentralTechCentral

    Subscribe to the newsletter

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    Facebook X (Twitter) YouTube LinkedIn
    WhatsApp Facebook X (Twitter) LinkedIn YouTube
    TechCentralTechCentral
    • News

      Public money, private plans: MPs demand Post Office transparency

      13 June 2025

      Coal to cash: South Africa gets major boost for energy shift

      13 June 2025

      China is behind in AI chips – but for how much longer?

      13 June 2025

      Singapore soared – why can’t we? Lessons South Africa refuses to learn

      13 June 2025

      10 red flags for Apple investors

      13 June 2025
    • World

      Yahoo tries to make its mail service relevant again

      13 June 2025

      Qualcomm shows off new chip for AI smart glasses

      11 June 2025

      Trump tariffs to dim 2025 smartphone shipments

      4 June 2025

      Shrimp Jesus and the AI ad invasion

      4 June 2025

      Apple slams EU rules as ‘flawed and costly’ in major legal pushback

      2 June 2025
    • In-depth

      Grok promised bias-free chat. Then came the edits

      2 June 2025

      Digital fortress: We go inside JB5, Teraco’s giant new AI-ready data centre

      30 May 2025

      Sam Altman and Jony Ive’s big bet to out-Apple Apple

      22 May 2025

      South Africa unveils big state digital reform programme

      12 May 2025

      Is this the end of Google Search as we know it?

      12 May 2025
    • TCS

      TechCentral Nexus S0E1: Starlink, BEE and a new leader at Vodacom

      8 June 2025

      TCS+ | The future of mobile money, with MTN’s Kagiso Mothibi

      6 June 2025

      TCS+ | AI is more than hype: Workday execs unpack real human impact

      4 June 2025

      TCS | Sentiv, and the story behind the buyout of Altron Nexus

      3 June 2025

      TCS | Signal restored: Unpacking the Blue Label and Cell C turnaround

      28 May 2025
    • Opinion

      Beyond the box: why IT distribution depends on real partnerships

      2 June 2025

      South Africa’s next crisis? Being offline in an AI-driven world

      2 June 2025

      Digital giants boost South African news media – and get blamed for it

      29 May 2025

      Solar panic? The truth about SSEG, fines and municipal rules

      14 April 2025

      Data protection must be crypto industry’s top priority

      9 April 2025
    • Company Hubs
      • Africa Data Centres
      • AfriGIS
      • Altron Digital Business
      • Altron Document Solutions
      • Altron Group
      • Arctic Wolf
      • AvertITD
      • Braintree
      • CallMiner
      • CYBER1 Solutions
      • Digicloud Africa
      • Digimune
      • Domains.co.za
      • ESET
      • Euphoria Telecom
      • Incredible Business
      • iONLINE
      • Iris Network Systems
      • LSD Open
      • NEC XON
      • Network Platforms
      • Next DLP
      • Ovations
      • Paracon
      • Paratus
      • Q-KON
      • SkyWire
      • Solid8 Technologies
      • Telit Cinterion
      • Tenable
      • Vertiv
      • Videri Digital
      • Wipro
      • Workday
    • Sections
      • AI and machine learning
      • Banking
      • Broadcasting and Media
      • Cloud services
      • Contact centres and CX
      • Cryptocurrencies
      • Education and skills
      • Electronics and hardware
      • Energy and sustainability
      • Enterprise software
      • Fintech
      • Information security
      • Internet and connectivity
      • Internet of Things
      • Investment
      • IT services
      • Lifestyle
      • Motoring
      • Public sector
      • Retail and e-commerce
      • Science
      • SMEs and start-ups
      • Social media
      • Talent and leadership
      • Telecoms
    • Events
    • Advertise
    TechCentralTechCentral
    Home » Investment » Tencent is world’s worst bet after R2.5-trillion bloodbath

    Tencent is world’s worst bet after R2.5-trillion bloodbath

    By Agency Staff29 July 2021
    Twitter LinkedIn Facebook WhatsApp Email Telegram Copy Link
    News Alerts
    WhatsApp

    China’s unprecedented crackdown on its technology industry has turned Tencent Holdings from a market darling into the world’s biggest stock loser this month.

    The Chinese Internet giant has tumbled 23% so far in July, set for its worst month ever after erasing about US$170-billion (R2.5-trillion) of market value. That marks the fastest evaporation of shareholder wealth worldwide during this period. Nine of the top 10 losers in shareholder value this month are Chinese companies, including Meituan and Alibaba Group.

    The Shenzhen-based firm is one of the key casualties of an official campaign that targets some of the nation’s tech behemoths considered posing a potential threat to China’s data security and financial stability. The selloff in its shares has intensified in recent days after Beijing broadened the regulatory clampdown to include other once high-flying industries such as private education.

    I don’t see an end to the regulatory crackdown. Data security is a top priority to policymakers in the coming years. It’s a new normal

    “I don’t see an end to the regulatory crackdown. Data security is a top priority to policymakers in the coming years. It’s a new normal,” said Paul Pong, MD at Pegasus Fund Managers. “Valuations will have to be adjusted to cope with that, especially for technology giants like Tencent.”

    The regulatory storm has resulted in penalties such as the loss of exclusive music streaming rights and antitrust fines for Tencent. This week, the company said it was also suspending new user registration for its popular WeChat services and was ordered to fix mobile app-related issues.

    Cheap?

    Despite concerns about further punitive measures from regulators, the company’s stock is starting to look cheap and most analysts have refrained from cutting their price targets: Among the 68 analysts who have a rating on Tencent, 62 still recommend the stock as a “buy”. The average target price among analysts is HK$736.30, representing a 65% premium over Wednesday’s close.

    At HK$447.2, the stock is trading at 22.5x forward earnings, well below its historical average of 30x. It also has fallen to the most oversold level in more than six years.

    “Tencent trading below HK$500 is attractive, but the upcoming earnings will be a key thing to watch,” said Pong, adding that if the firm can achieve 20-30% growth, its shares could enjoy a solid rebound. “Because that would show they can still maintain good profitability in this tough environment.”

    Tencent’s Chinese headquarters

    To Citigroup analysts including Alicia Yap, any substantial share buyback by the company could also help reverse currently poor investor mood.

    “We believe if major Internet companies announce new share buyback programmes or increase size of existing buybacks, it would demonstrate the management’s confidence in fundamentals and reassure investors on profit growth outlook,” Yap and her colleagues wrote in a research note. Yap has a “buy” rating on the stock.  — (c) 2021 Bloomberg LP



    Alibaba Paul Pong Pegasus Fund Managers Tencent top WeChat
    Subscribe to TechCentral Subscribe to TechCentral
    Share. Facebook Twitter LinkedIn WhatsApp Telegram Email Copy Link
    Previous ArticleAltron gets new chairman and finance chief
    Next Article Transnet likely hit by Death Kitty ransomware attack

    Related Posts

    China is behind in AI chips – but for how much longer?

    13 June 2025

    Nvidia CEO says China is catching up fast in AI chip race

    29 May 2025

    Temu hits turbulence

    27 May 2025
    Company News

    Huawei Watch Fit 4 Series: smarter sensors, sharper design, stronger performance

    13 June 2025

    Change Logic and BankservAfrica set new benchmark with PayShap roll-out

    13 June 2025

    SAPHILA 2025 – transcending with purpose, connection and AI-powered vision

    13 June 2025
    Opinion

    Beyond the box: why IT distribution depends on real partnerships

    2 June 2025

    South Africa’s next crisis? Being offline in an AI-driven world

    2 June 2025

    Digital giants boost South African news media – and get blamed for it

    29 May 2025

    Subscribe to Updates

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    © 2009 - 2025 NewsCentral Media

    Type above and press Enter to search. Press Esc to cancel.