Jun 28, 2024 03:17 PM

Tencent Rides Hit Game for China’s Biggest Gain in Market Value

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Tencent Games’ booth at an event in Shanghai on July 30. Photo: VCG
Tencent Games’ booth at an event in Shanghai on July 30. Photo: VCG

(Bloomberg) — A hot new online game is refueling investor optimism for Tencent Holdings Ltd., driving China’s biggest stock boost of 2024.

Its shares have rallied 28% so far this year with help from the strong debut of Dungeon & Fighter Mobile (DnF Mobile), adding $91 billion in market value, more than any other Chinese company. Improved regulatory and business climates in the company’s key markets are also helping drive expectations.

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  • Tencent's shares have surged 28% in 2024, adding $91 billion in market value, primarily due to the success of "Dungeon & Fighter Mobile" (DnF Mobile).
  • Analyst price targets and earnings estimates have significantly increased, with options traders showing increased optimism.
  • The positive performance in the gaming sector, improved regulatory environment, and new game releases like "Honour of Fight" and "Squad Busters" are driving future expectations.
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Who’s Who
Tencent Holdings Ltd.
Tencent Holdings Ltd. has seen its shares rally 28% in 2024, driven by the success of "DnF Mobile," adding $91 billion in market value. Improved regulatory conditions and strong earnings estimates further bolster optimism. Tencent's game and advertising segments are thriving, making it Asia’s second-largest stock. Upcoming titles like "Honour of Fight" and "Squad Busters" are highly anticipated, signaling future growth.
NetEase Inc.
NetEase Inc. is mentioned in the context of the global game sector, where Tencent's Hong Kong-listed shares have outpaced gains from peers including NetEase. This highlights Tencent's strong performance relative to other companies in the industry, such as NetEase.
Nintendo Co. Ltd.
Nintendo Co. Ltd. is mentioned as one of Tencent's peers in the global game sector that it has outpaced in gains this year. However, no specific details about Nintendo's performance or initiatives are provided in the article.
Taiwan Semiconductor Manufacturing Co. Ltd.
Taiwan Semiconductor Manufacturing Co. Ltd. is currently Asia's largest stock, surpassing Tencent Holdings Ltd. Following Tencent's recent rally, it now stands as the second-largest stock in Asia.
Supercell Oy
Supercell Oy is a Finnish unit of Tencent Holdings Ltd. The company is set to release "Squad Busters," its first new game in five years, which is generating high expectations for success. Supercell, known for developing popular mobile games, is part of Tencent's efforts to bolster its gaming segment and market presence.
Huawei Technologies Co. Ltd.
Huawei Technologies Co. Ltd. is reportedly considering a commission rate of 20% on its Harmony mobile operating system, significantly lower than the industry norm. This move could influence other Android app stores like Oppo and Xiaomi, which currently charge higher fees, to reduce their commissions.
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What Happened When
February 2024:
Beijing approved Dungeon & Fighter Mobile (DnF Mobile).
By April 2024:
Goldman Sachs Group Inc. raised its price target for Tencent by 17%.
Late May 2024:
Launch of Dungeon & Fighter Mobile (DnF Mobile).
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