- Citigroup increased the price target to HKD876 (up 19%)
- Consensus stands at 93.7% for Buy rating
- Focus on Weixin and Gaming growth
As of writing, TENCENT opened up in HK at HKD707 (up 2.3%) and maintain a strong rally reaching a high of HKD735.5 (up 6.4%). 6.4% up is a good record that has not been recorded since July 2020.
It is interesting to see how a price target from a bank right before the opening bell of HKEx will drive the stock price.
I tried digging around to find any other big significant news that might be driving the the price higher.. and other than the price target by Citi.. nothing really stood out other than...
Kuaishou IPO
Kuaishou Technology (main rival to ByteDance Ltd) is seeing to raise as much as USD5.4billion putting it as the world's biggest internet IPO since Uber. This startup is backed by Tencent Holdings <-- highlight. The better the IPO does, as we've seen in recent times.. mostly will perform way better from their IPO price.. it will drive Kuaishou's valuation up.. in-directly driving up Tencent's balance sheet.
Kuaishou is looking to sell 365million shares at HKD105~115 each.. which puts its valuation at USD28.6billion.. expectations are valuation could double or more after the IPO which will put Kuaishou at USD55.6~60.9billion.
Tencent has about 21.6% stake in Kuaishou.. so you see the link here..
Tencent is currently trading at HKD720 (4.2% up) putting it around 29% up on the month and 27% up YTD.
What's your take on Tencent? Buy at high and wait till the price target? or try to get a piece of Kuaishou before it doubled? Personally, I won't jump straight into a bull market, especially not for a slightly longer term unless I am looking to trend trade.. will try to pick up some if it drops.
Cheers~ Happy week ahead!
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