Hong Kong Stockbrokers Can’t Get Enough From Tencent Holdings Ltd. not, the $ 930 billion giant that is at its fastest monthly profit.
They pay for bullish derivatives tracking the Chinese internet company, and buy thousands of call options in January that expire on Thursday. The price of one Tencent contract, which bets the share, will rise over the course of HK $ 800 – rose to 90 300% on Monday. Traders also rushed to unload their clumsy pits, and one of the most traded contracts lost 84% in value.
The stock rose 10% on Monday to 760 HK, which is about two-fifths of the profit on the Hang Seng index. The Hong Kong benchmark has risen by 2.1% and will close above the key level of 30,000 points for the first time since May 2019.
Tencent has become a major target for mainland traders who are flooding record amounts of cash in Hong Kong –listed shares this year, with the net purchase of the shares making up about a quarter of the total money, according to the exchange data. The buying rust also increased Tencent’s market value this year by about $ 232 billion, the most worldwide, according to data compiled by Bloomberg. Tesla Inc. is the second largest profit maker, with $ 134 billion.
Tencent shares are now trading nearly 39 times analysts’ estimated earnings for the next 12 months. Although well above the average of 30 since Bloomberg began tracking the data in 2005, it is still lower than the recent peak of 42 reached in 2014 and 2018. It reached 65 at the peak of China’s stock bubble in 2007.
On Monday, analysts at Citigroup Inc. their target price on the firm increased by 19% to $ 876 HK, the highest among analysts followed by Bloomberg, citing the expansion and growth of market share in the gambling industry and other digital businesses.
Tencent is also getting an extra boost by participating in the city’s fast-growing initial public offering market. Kuaishou Technology, backed by Tencent, is which is trying to raise as much as $ 5.4 billion in Hong Kong in what would be the largest internet listing since Uber Technologies Inc.
With the recent run-up, Tencent is trading at the highest price it has recorded. This largely avoided the tightened regulatory oversight that led to a sale of rival Alibaba Group Holding Ltd. caused, and the participating Ant Group Co. forced to give a record listing.