First Business News Portal in English from Nepal
HONG KONG (Reuters) – China’s Tencent Holdings will be under pressure to address concerns on the impact of a US ban on WeChat-related transactions and outline its plans to mitigate any fallout as it reports second-quarter results on Wednesday.
The ban, to take effect in September and the latest salvo in a worsening U.S.-China standoff, has cast a shadow over Tencent that aims to eventually get about half its gaming revenue from overseas, versus 23% as of last year. The United States would be key to such a plan as it is the No.2 gaming market after China.
Tencent shares plunged more than 10% within hours on Friday after news of the ban, knocking as much as $74 billion off the tech giant’s market value.
“The order as written is so broad that it could end up blocking the ability of any U.S. person or company from working with Tencent,” said Dan Wang, analyst with Gavekal Dragonomics.
So far, Asia’s largest gaming and social media firm has said it is reviewing the potential consequences. Financial markets and millions of consumers will be seeking more clarity when Tencent unveils its April-June results.
Tencent is expected to post a 27% jump in revenue to 112.76 billion yuan ($16.22 billion) and a 14% higher profit, Refinitiv data shows, on strong demand from users stuck at home due to coronavirus-related curbs.
Its subsidiary U.S.-listed Tencent Music has reported better-than-expected quarterly results.
The unit said it was “premature” to speculate over a potential delisting, in response to a question on if it had a plan to react to a recommendation from the Trump administration on auditing U.S.-listed Chinese firms.
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