HONG KONG: Tencent
No surprises here. Similar to 2017, Tencent Holdings was the most actively traded stock on the Hang Seng Index in the first half of the year, with a trading volume of HKD 1,457,636,576,508 ($185.7 billion).
Analysts expect the tech giant to record healthy revenue growth of about 25% or more over the next few years driven by online games, social communications, online advertising, and cloud computing.
Jefferies estimates 2018 revenue to grow by 42.6%, followed by 33.8% growth in 2019 and 24.2% in 2020.
For private banks, companies like Tencent sit right at the intersection of two positives: Asia ex-Japan equities and technology.
UBS Wealth Management said that the rise of Asian tech giants and their contribution to the regional index – IT makes up 32% of the MSCI Asia ex-Japan index – is helping boost aggregate earnings growth for the region.
‘At present, we believe our fintech longer-term investment theme offers the most interesting opportunity,’ UBS analysts said in a monthly newsletter on investing in Asia-Pacific.
‘Meanwhile, Chinese depository receipt listings could benefit offshore tech issuers thanks to the potential valuation premium paid by the onshore investors.’