Tencent Shares Gain on 'Dungeon & Fighter Mobile' Release Plans
By Sherry Qin
Tencent shares rose after the Chinese company surprised investors with plans for an earlier-than-expected release of "Dungeon & Fighter Mobile," a mobile game adapted from a global best seller that analysts hope can reignite the gaming giant's growth.
Shares were up 5.9% in afternoon trade Monday at 321.60 Hong Kong dollars ($41.06), on track for their largest one-day percentage gain since July.
Tencent said Monday that it will release the new title--a mobile game adaptation of the blockbuster "Dungeon & Fighter" computer game--on May 21 in China. The computer-based version of the game, developed by South Korean company Nexon, is one of the highest-grossing video games in history.
HSBC analysts said in February that they expect the new mobile adaptation to generate CNY11 billion in revenue next year for Tencent, pointing to its popularity than 50 million pre-registrations in China at the time.
Citi analyst Alicia Yap said the release came sooner than expected, and suggested the market would see it as a positive development for games revenue in the second quarter and beyond. Citi has a buy rating on shares with a HK$459 target price.
Citi expects Tencent's first-quarter domestic games revenue to decline 6% on year amid a lack of meaningful game titles during the period, after the company's domestic games sales declined 3% in the fourth quarter.
China's online-game industry has been in the spotlight amid a regulatory crackdown since 2021, but authorities have signaled a letup in recent months.
In a surprise move, China's gaming regulator in February approved a new batch of foreign video games, including the Dungeon & Fighter mobile game. Analysts viewed that move as part of efforts to reverse a prolonged decline in the country's stock markets and support a slowing economy.
Write to Sherry Qin at sherry.qin@wsj.com
(END) Dow Jones Newswires
April 22, 2024 02:30 ET (06:30 GMT)
Copyright (c) 2024 Dow Jones & Company, Inc.-
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