The stock fell more than 4% in Hong Kong on Monday, following a 4.4.% drop on Friday. China’s top financial regulators see Tencent as the next target for increased supervision after the clamp down on Jack Ma’s Ant Group, people with knowledge of their thinking have said. Like Ant, Tencent will probably be required to establish a financial holding company to include its banking, insurance and payments services.
“All else equal, we think it could be argued that Tencent’s fintech business is now valued at almost zero,” the Bernstein analysts wrote in a research report, citing Friday’s loss. “This is significant, as it implies any further declines from here would essentially imply a de-rating of the Tencent multiple.”