With Challenging Industry Dynamics, Tencent's Pace Of Recovery Remains Unclear To Analysts

Benchmark analyst Fawne Jiang reiterated a Buy on Tencent Holding Ltd TCEHY and cut the price target to HK$345.00.
With China's growth outlook reset and the high level of internet penetration, he expects that the early-stage hypergrowth for Big Tech platforms in China is behind him.
Jiang saw pockets of opportunities and anticipated deep-pocketed and innovative platforms will be diligently repositioning, as he had observed in Tencent's recent efforts in their overseas game expansion and SaaS initiatives.
Admittedly these efforts will take time to translate into meaningful topline impact.
In the near term, Jiang anticipates muted growth across segments, particularly in games and business services, and has lowered his FY22 and FY23 estimates.
The company will continue focusing on cost savings and capital returns.
Excluding its investment portfolio, Tencent's pace and magnitude of growth recovery remain unclear.
Mizuho analyst James Lee maintained a Neutral with a HK$300.00 price target.
OPI beat expectations due to cost controls, and the capital allocation policy remained favorable with buybacks and special dividends.
As anticipated, the top line was mixed due to lower activities for games and lockdown impact on Fintech, but offset by strength in advertising.
The gaming business in China remained challenging due to a lack of new significant titles and a slower approval process.
The company invests in international games, mini-programs for e-commerce, and business services to align with policies.
He maintained his FY24 EBITDA estimates of RMB 224 billion.
Price Action: TCEHY shares traded higher by 5.51% at $39.06 on the last check Thursday.
Photo by Chris Yunker via Flickr

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