A pedestrian walks past a Tencent Holding Ltd. logo at the company's headquarters in Shenzhen, China, on Saturday, March 20, 2021. Asias largest conglomerate was censured by Chinas antitrust watchdog on Friday as Beijing expands a crackdown that began with Jack Mas online empire. Photographer: Qilai Shen/Bloomberg 
Beijing’s sprawling crackdown on private enterprises saw Tencent’s shares sink almost 50% from its February peak, while crimping earnings as the government sought to promote what it calls a “common prosperity” agenda. Bargain hunters have piled in as the selloff sent the company to trade at an eight-year low to its forecast earnings.
“The net buying in August was likely due to some bottom-fishing activities by long-term funds that focus on the company’s fundamentals,” said Christopher Ho, an analyst at Kgi Hong Kong Ltd.
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Still, it remains uncertain how sustainable the rebound could be as the government’s crackdown seems to be far from ending. Analysts have cut Tencent’s earnings forecast by 5% for the next 12 months on concerns there might be more regulatory limits.
The government’s latest restrictions over gaming time for children will “represent another setback to the industry, potentially send another wave of negative sentiment to the market and lower investors’ overall expectations for future gaming industry growth,” Citigroup analysts including Alicia Yap wrote in Tuesday note.