Tencent shares dive after Chinese media brand online games ‘spiritual opium'

Tencent shares dive after Chinese media brand online games ‘spiritual opium’

FILE PHOTO: Visitors are seen at the Tencent Games booth during the China Digital Entertainment Expo and Conference, also known as ChinaJoy, in Shanghai, China, July 30, 2021. (Reuters)

Tencent Holdings Ltd dived as much as 11% Tuesday after an offshoot of China’s official news agency decried the “spiritual opium” and “electronic drugs” of games, stoking fears Beijing will next set its sights on online entertainment.

The social media giant joined rivals NetEase Inc and XD Inc in an abrupt selloff in early Hong Kong trading after an outlet run by the Xinhua News Agency published a blistering critique of the gaming industry. The Economic Information Daily cited a student as saying some schoolmates played Tencent’s Honor of Kings — one of its most popular titles — eight hours a day and called for stricter controls over time spent on games. The online link to the post was removed hours later — though the story remains in the print version — and Tencent recouped some of its losses in afternoon trade.

Still, the strongly worded article spooked investors already on edge after Beijing came down hard on online industries from e-commerce to ride-hailing, triggering a global selloff of Chinese shares that at one point surpassed $1 trillion. Nervous investors continue to reevaluate their holdings as they ponder the longer-term ramifications of a crackdown on firms from Jack Ma’s Ant Group Co and Alibaba Group Holding Ltd to Tencent-backed Meituan and Didi Global Inc. Tencent has now shed more than $110 billion or roughly 17% of its market value since the start of last week, when Beijing sharply amped up its campaign.

“No industry or sport should prosper by eradicating an entire generation,” the article said, citing an academic at a state-backed institution.

The concerns Tuesday are bleeding over to Japanese and Korean gaming stocks as well. Shares of Nexon Co., which gets about 28% of its revenue from China, dropped as much as 10%, the most since May 13 and their lowest since May 2020.

“You can never pay too little attention to any Xinhua story,” said Ke Yan, a Singapore-based analyst with DZT Research. “The word choice of spiritual opium is especially harsh, it would be surprising if the regulators won’t do anything about this.”

China’s most valuable corporation has run afoul of regulators in the past, most notably in 2018 when watchdog agencies clamped down on gaming addiction and temporarily suspended monetisation licences, walloping Tencent’s main business. The term “spiritual opium” has in fact been employed in Chinese media in the past to call attention to the prevalence of gaming among youths, tracing back to the era of PC gaming in cybercafes.

In response, Tencent has restricted playing time for minors and imposed other measures to try and curb addiction. Just last month, it installed facial recognition systems for certain games to prevent kids from using their parents’ IDs to buy in-game items. In the fourth quarter of 2020, minors aged under 18 accounted for just 6% of the company’s Chinese online gaming gross receipts.

It’s unclear whether regulators now intend to re-focus on the gaming sector, or other parts of Tencent’s vast media and entertainment empire. On July 27, Tencent said it was suspending new user registrations for its WeChat messaging super-app, prompting concerns about Beijing’s intentions for the gaming industry leader.

Investors fled Tencent and its internet peers in recent weeks after China announced its toughest-ever curbs on the online education industry and issued a series of other edicts governing illegal online activity and food delivery.

Xi Jinping’s government has in the past nine months embarked on a series of crackdowns on China’s most influential private-sector companies over issues ranging from antitrust to data security, as it seeks to rein in the tech giants’ influence.

“The market is on a razor’s edge and is extremely jumpy especially after last week, but I think this will only bring more of a technical adjustment to the way things are done, rather than bring in a new risk factor that has not been already priced in,” said Chen Yicong, managing director at Beijing Chengyang Asset Management Ltd. “But this has happened before and all of the mechanisms to prevent addiction.

News Related


Fintech, telehealth firms top LinkedIn's list of emerging Singapore start-ups

Financial advisory firm Endowus (left) and telemedicine start-up Doctor Anywhere were among the start-ups in the list. SINGAPORE – Fintech, telehealth and e-commerce firms are among start-ups in Singapore that ... Read more »

DICGC to pay depositors of 21 insured banks placed under all inclusive directions

Deposit Insurance and Credit Guarantee Corporation (DICGC) on September 21 announced it shall pay the depositors of the insured banks placed under the all-inclusive directions (AID) an amount equivalent to ... Read more »

Independent Directors | We need less confusion, more relaxation of norms

On August 19, the Ministry of Corporate Affairs gave some relief to aspiring independent directors . Certain further categories of people have been exempted from passing an online proficiency test ... Read more »

Zoom faces US security review of US$14.7 billion deal for Five9 over China ties

The US Department of Justice has called for a review of Zoom Video Communications’ planned US$14.7 billion acquisition of cloud-based customer service provider Five9 on national security grounds. The review ... Read more »

Do you need REIT investments for your portfolio?

REITs (real estate investment trusts) are quite popular among investors in the developed markets. Indian investors, on the other hand, have been introduced only recently to the concept of REITs. ... Read more »

Personal data of 106m travellers exposed online

People wait to clear immigration outside the arrivals hall at Suvarnabhumi airport in 2017. Their personal information, along with that of millions of other travellers over the past decade, could ... Read more »

Consumers buy more for the first time than before the corona crisis

Consumers spent more in July than before the corona crisis for the first time. More money was spent in particular on services such as hairdressing, restaurants, cinemas and telephone and ... Read more »

Worldwide semiconductor market to grow by 17.3% in 2021: IDC

The worldwide semiconductor market is expected to grow by 17.3 per cent in 2021 versus 10.8 per cent in the previous calendar year, according to research firm IDC. The industry ... Read more »

Paras Defence IPO: Public offer subscribed 19.88 times on Day 2 of bidding

The initial public offering of Paras Defence and Space Technologies continues to see strong demand, with issue being subscribed 19.88 times by the morning of September 22, the second day ... Read more »

KEC International share price gains 4% on orders worth Rs 1,157 crore

KEC International share price added more than 4 percent intraday on September 22 after the company won new orders worth Rs 1,157 crore across its various businesses. Its Transmission & Distribution (T&D) ... Read more »

Consumption for the first time higher than before the corona crisis

Dutch consumption for the first time exceeded the level before the corona crisis in July. According to Statistics Netherlands (CBS), consumers spent 2.1 percent more than in July 2019. For ... Read more »

Zee-Sony merger to create largest entertainment network in India with 26% viewership share

Sony Pictures Networks India (SPNI) and Zee Entertainment Enterprises Ltd (ZEEL) announced that they had entered into an exclusive, non-binding Term Sheet to combine both companies’ linear networks, digital assets, ... Read more »

Zee-Sony merger includes $1.57 billion fund infusion in Zee

Zee Entertainment Enterprises (ZEE) board, on September 22, proposed merger between Zee and Sony Pictures Networks India (SPNI) by way of which the eventual shareholding of Sony in Zee will ... Read more »

National consumer commission orders Supertech MD's arrest for failing to refund homebuyer

Supertech’s twin towers (File image) The national consumer commission has sentenced Supertech MD, Mohit Arora, to three years in jail for failing to refund a homebuyer after not handing over ... Read more »

Tata Motors share price up 3% on plan to hike commercial vehicle prices

Tata Motors share price gained 3 percent in the morning session on September 22, a day after the automaker said it would hike the price of its commercial vehicles by ... Read more »

Maersk is now heading for biggest profit in Danish history

A.P. Moller-Maersk A/S is now heading for a full-year profit that will match its combined results from the past nine years and make business history in its home country Denmark. ... Read more »

Hong Kong's BN(O) emigrants are more likely to rent in the UK than buy, even as a stamp duty holiday ends and home prices plunge

Hong Kong immigrants under the British National (Overseas) scheme are more likely to rent when they first set foot in the United Kingdom than rushing into buying residential property, brokers ... Read more »

Zee-Sony merger to have largest entertainment network in India

Sony Pictures Networks India (SPNI) and Zee Entertainment Enterprises Ltd (ZEEL) announced that they had entered into an exclusive, non-binding Term Sheet to combine both companies’ linear networks, digital assets, ... Read more »

Here is why Paras Defence IPO subscribed over 16 times on the first day of bidding

Paras Defence and Space Technologies‘ initial public offering (IPO) has seen an overwhelming response from investors on the first day of bidding itself — on September 21. It was oversubscribed ... Read more »

These 8 fertilizer stocks doubled in a year, but saw up to 40% dip recently; worth a look?

Fertilizer stocks have been on a good run since the last 12 months. Many of the top stocks hit their 52-week high a couple of months back on expectations of ... Read more »

Moneycontrol PRO presents Quants League – Live Algorithmic Options Trading Virtual Conference

QUANTS LEAGUE is a biannual online conference that spans across 5 days inviting recognised and renowned speakers from across the globe sharing their wisdom and knowledge in building algorithm and ... Read more »

Gold Price Today: Yellow metal to remain range-bound ahead of Fed meet outcome

Gold was trading flat in the Indian market on September 22 amid rising uncertainties triggered by China Evergrande’s debt crisis and anticipation of policy cues from the US Federal Reserve ... Read more »

Will adding Indian debt securities to global bond indices reduce yields? Kotak MF's Lakshmi Iyer gives her take

If a country’s bonds are included in debt market indices run by global index makers, it acts as a guide for foreign investors to invest in Indian securities. Morgan Stanley ... Read more »

Flying cars in 2024? This tech CEO says it's commercially possible

Flying cars could be commercially available in 2024, but regulations for managing the new form of air traffic will be a concern, according to the chief executive officer of a ... Read more »

Mass testing ordered at all Korat markets Rise in Covid-19 cases linked to major farm produce market

Vendors and people living near Home Gardenville Sra Krok market in tambon Jor Hor in Muang district, Nakhon Ratchasima, queue for Covid-19 antigen kit testing.(Photo: Prasit Tangprasert) NAKHON RATCHASIMA: Mass ... Read more »

Australia's Zip enters Indian buy-now-pay-later space with ZestMoney deal

Founded by (L-R) Priya Sharma, Ashish Anantharaman and Lizzie Chapman in 2015, ZestMoney is a digital omnichannel BNPL player with a merchant network of 10,000 online and 75,000 physical stores. ... Read more »

Merger with ZEE in line with company's vision: Sony Pictures CEO tells employees

Sony Pictures CEO Tony Vinciquerra told employees that the merger with Zee Entertainment will be a huge opportunity for the company and will help lead consumer transition from traditional pay-TV ... Read more »

Zee Entertainment shares hit upper circuit on merger deal with Sony Pictures India

Zee Entertainment Enterprises (ZEE) shares were locked at 10 percent upper circuit in early trade on September 22 after the company signed a merger deal with Sony Pictures India. “The ... Read more »

Zee-Sony Pictures deal takes care of all stakeholders: Sources

The Zee Entertainment Enterprises (ZEE) stock is expected to continue to build on the gains clocked after the seemingly unexpected move to merge with Sony Pictures. What seems to the outside ... Read more »

Prawit insists ties with Prayut, Anupong remain solid

Deputy Prime Minister Prawit Wongsuwon, left, and Prime Minister Prayut Chan-o-cha sit side by side in the parliament during the recent no-confidence debate. (Parliament photo) Deputy Prime Minister Prawit Wongsuwon ... Read more »

The all new MFC platform: Will it be a one-stop portal for all mutual fund transactions?

Investing in a mutual fund (MF) is quite simple these days, more so if you are tech savvy. But it is not that easy to register your complaints and get ... Read more »

5 steps for a smooth cashless health insurance claim experience

Most health insurance companies offer cashless claim settlement of hospitalization bills. Though not complicated, it important to follow a set of steps and processes for you to make the claim ... Read more »

Our youth flock to Lisbon: beautiful life or starvation wages?

Premium The best of De Telegraaf ‘After a broken arm, resignation letter on the mat’ LISBON – In cozy bars such as the Ache Cohiba and Cargo 111 in the ... Read more »

US to probe Zoom's USD14.7 billion Five9 deal for national security risks

A US government committee that reviews foreign investment in telecom is probing videoconferencing company Zoom‘s $14.7 billion deal for cloud call centre company Five9. In an August filing with the ... Read more »

Evergrande signs deal to avoid default on key bond

Chinese property developer Evergrande has admitted facing ‘tremendous pressure’ as it tackles a debt pile of more than $300 billion. BEIJING: Embattled Chinese housing giant Evergrande said on Wednesday it ... Read more »

Br 01 cyber skull sapphire only watch

BR 01 CYBER SKULL Only Watch 21 ONLY WATCH 21 For its 9th edition, the biennial auction of unique timepieces sold for the benefit of research on Duchenne Muscular Dystrophy ... Read more »

Buy USDINR; target of: : 74.0 : ICICI Direct

ICICI Direct’s currency report on USDINR US dollar decline by 0.04% yesterday as US stocks ended mixed. Further, market participants awaited outcome of Fed monetary policy meeting. However, sharp fall ... Read more »

More than £1bn in state pensions underpaid due to 'repeated human errors'

Most of those affected are likely to be women and the true value of the underpayments will only become clear once the DWP has completed its review of all cases. Read more »

August exports up, says minister

Exports increased in August but at a slower pace than in July as coronavirus restrictions hit manufacturing and logistics, the commerce minister said on Wednesday. Exports should remain positive for ... Read more »

StarHub to buy majority stake in MyRepublic's Singapore broadband business

SINGAPORE – Local telco StarHub will be buying a majority 50.1 per cent stake in rival Internet service provider MyRepublic’s broadband business for residential and enterprise customers in Singapore, which ... Read more »