One Chinese technology stock has gained traction among analysts in recent weeks. That’s internet giant Tencent, best known for its gaming business and operating WeChat, one of the world’s largest messaging apps. Over the past three weeks, 14 analysts have raised their price targets on the stock, but none have lowered them, according to a CNBC Pro screen using FactSet. CNBC Pro screened all stocks for which analysts raised their price targets during the period. Tencent is also the only stock included in Goldman Sachs’ monthly investment list in the Asia-Pacific region in July. The list includes the bank’s selection of 15 to 30 of the region’s top buy-rated stocks. Goldman Sachs said in a report on July 1 that among all Chinese Internet stocks, Tencent has one of the “most obvious and sustainable” profit growth, with profit growth of about 20%. The bank added that this was thanks to an “acceleration” in gaming revenue driven by new games and ad market share growth. Goldman Sachs said these two factors are not yet reflected in the stock’s valuation. The bank gave Tencent a price target of HK$477 (US$61), representing a potential upside of approximately 24%. Jefferies said in a report in June that Tencent has shown “strong execution” on its gaming strategy and “revitalized existing games through solid channels.” “We believe Tencent is a global leader in mobile games with a proven track record of developing successful games,” Jeffries said, reiterating that Tencent is the first choice for China’s online industry. “We believe Tencent’s evolution from consumer Internet to industrial Internet, while retaining its solid foundation in gaming and expanding advertising market share, paves the way for future success,” it added. According to FactSet, 97% of analysts have a buy rating on the stock, with a potential upside of 21.8% from the consensus price target. Tencent’s stock price has risen nearly 30% so far this year. Tencent’s first-quarter financial report showed that its revenue and profits exceeded expectations. Its adjusted net profit increased by 62% year-on-year, the fastest growth since the third quarter of 2021.
