Tencent, the world's most disappointing mega-cap - TechCentral

Tencent, the world’s most disappointing mega-cap

Tencent’s Chinese headquarters

For the most disappointing stock trade in the world this year, step forward Tencent Holdings.

Of the 10 companies worth more than US$100-billion that analysts predominantly rate as buy, Tencent — 31.2% owned by South African-listed Naspers — has by some distance had the worst 2018, data compiled by Bloomberg show. The Internet giant tumbled 22% in Hong Kong through to Tuesday, wiping out $108-billion in value, as the company failed to maintain earnings momentum and a government clampdown clouded the outlook for the games industry.

The reversal has been swift. It was only in January that Tencent reached a record high of HK$474.60, following a 64 000 percent climb from its 2004 trading debut. Analysts have been reluctant to give up their bullish calls on the stock, which is the biggest on the MSCI Emerging Markets Index with an almost 5% weighting. Their average price target is HK$451.10, implying a 41% rebound over the next 12 months. The stock rose 0.6% to HK$320 as of 10.02am in Hong Kong.

Other investment disappointments include Belgian brewer Anheuser-Busch InBev and South Korea’s Samsung Electronics but Chinese companies predominate. Benchmark indexes in Hong Kong and Shanghai have slumped this year amid concern about an economic slowdown and a trade war with the US.  — Reported by Kana Nishizawa, (c) 2018 Bloomberg LP