Tag: Prosus

By Jackie Cameron for BizNews

Chinese stock market darling Tencent has been a significant force behind the Naspers share price. The Tencent holding was moved to Prosus, which became Europe’s biggest listed consumer internet firm when it floated on the Amsterdam stock exchange at a valuation of more than €100bn in September. Prosus is controlled by Naspers. Prosus recently cautioned that not all of its operations had coped well with Covid-19. Tencent, however, has benefited from an uptake in gaming as people have self-isolated in lockdowns. BizNews Premium partner the Wall Street Journal reported that Tencent Holdings’ first-quarter profit was fuelled by strong demand for mobile games as homebound Chinese consumers turned to online entertainment during the coronavirus pandemic. Tencent, the world’s biggest video game company by revenue, said its January-March net profit grew 6% to 28.9 billion yuan ($4.08bn) from the same period last year. Revenue rose 26% to 108.1 billion yuan. Both beat analyst estimates, according to FactSet.

Tencent experiences $305bn rebound

Tencent surged toward a record Tuesday after a $305bn rally since its 2018 low.

The stock rose as much as 5.1% Tuesday, putting Tencent on pace for its highest-ever close. Shares, poised to have their best month since January 2012, have surged nearly 50% from March’s bottom to send Tencent’s market value above HK$4.7trn ($606bn).

After doubling in 2017, shares were almost halved at one point the following year as gaming approvals dried up and a slowing economy in China cooled advertising demand. But gaming has been a strong point in 2020 for Tencent in the wake of Covid-19 lockdowns. Analysts’ average stock target has risen 13% the past six weeks while Chinese investors have been holding a record amount of the company’s equity, according to data compiled by Bloomberg.

By Jeanny Yu for Bloomberg, Fin24 

China’s biggest online platform Tencent’s accelerating sell-off could get a lot worse if the stock fails to hold above its key support level.

There’s a risk that will happen Thursday: Asia’s biggest stock was down 0.6% in Hong Kong as of 1:03 p.m. local time, despite an otherwise upbeat stock market.

Tencent is now trading below the key level of HK$320 that supported its shares on three occasions this year. The stock has lost about 20% since a peak in April, equivalent to some $93 billion in market value.

Naspers, which via its new digital company Prosus owns a 31% stake in Tencent, is also feeling the pain. Both shares fell by more than 5% yesterday, losing R145 billion of their combined market value in a single day.

While the Tencent shares have been stuck in a downtrend for months, selling was particularly aggressive Wednesday despite no apparent trigger.

Theories circulating round some trading floors included souring sentiment from investors in China, as well as concern that Tencent’s decision to air National Basketball Association games may backfire.

Adding to jitters this week was a local media report that China is considering revising a law to control young people’s online gaming activities – a business that remains one of Tencent’s most profitable.

The Internet giant will report third quarter earnings on November 13.

Prosus, which is currently trading at around R1,020, has now lost almost 18% of its value since its listing in Amsterdam and on the JSE mid-September.

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