Tencent has seen its stock price decline in recent months. This is mainly due to the short-term general malaise in the Chinese stock market. The Trump administration’s trade protectionist measures are the prime reason for this.
Tencent has also been negatively affected by the Chinese government’s strictures on gaming. The future direction of the government’s gaming policy will affect the stock price quite substantially in the short to medium term. Medium to long term the government’s policy on finance will also have a strong influence on the company’s prospects.
There are a host of growth drivers in which the company is involved. Some of these are through investments in outside companies which are generally marked at book value. Market value of these investments would be much higher and are another reason to consider the company a good long-term investment.
In the key areas of gaming and fintech, it is likely the Chinese government will allow the big players such as Tencent to continue to dominate and grow substantially.