Buy or Sell Tencent stocks?

Tencent’s profit drops as Chinese government freezes game approval. Due to a temporary suspension of game monetisation approval and a regulatory restructuring of the government,Tencent’s share plunge for a fourth day. And now it falls to about HKD 325 dramatically.

Tencent was always supposed to be the star that goes no wrong. However, it surprised the investors with the first profit drop after a freeze on the new game approval in China. It’s also a reminder for the investors that the Chinese government can really break some of these major technological companies like Tencent. No one really knows when the approval will start again. As Tencent’s revenue is really relying on gaming in the recent years, the regulatory restructuring really hurts.

Furthermore, like I said in my previous post, the major investors of Tencent have already offloaded their shares and they are shifting their funds from Tencent in the previous months. Tencent is no longer a sure bet for individual investors.

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