[ET Net News Agency, 22 November 2019] Macquarie Research initiated coverage of Tencent
Holdings (0700) with an "outperform" rating and an HK$410 target price. It sees the
velocity of margin decline, which has persisted since 2014, lowing and stabilizing in
2019.
Meanwhile, all four of Tencent's key growth pillars - online entertainment, games,
advertising, and fintech - have been facing headwinds, whether it be from competition,
regulation or from being in an investment cycle, said the research house.
A modest recovery in any or some of these areas could support a better-than-expected
profit recovery, Macquarie thinks. With the stock trading at negative one standard
deviation versus its historical trading range, Macquarie believes the stock prices in the
challenging environment and see upside risk should business momentum start to recover.
It forecast Tencent's 2019/20 EPS of RMB10 and RMB11.9 respectively. (KL)
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00700 TENCENT
Nominal 
304.800 +4.000 (+1.330%) Research Report
22/11/2019 18:01
{I-bank focus}Macquarie starts Tencent (00700) at HK$410
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