Tencent downgraded to Hold at Erste Group on lower revenue growth

As previously reported, Erste Group downgraded Tencent (TCEHY) to Hold from Buy. With consumption in China remaining weak, WeChat Pay’s transaction volume and merchants’ advertising spending are likely to increase only slightly and revenue growth in this financial year should be lower than in the previous year, the analyst tells investors. In addition, the trade conflict between the U.S. and China could lead to restrictions on Tencent’s ability to purchase advanced AI chips from U.S. suppliers like Nvidia (NVDA), potentially hampering the company’s AI ambitions if tensions escalate, the analyst added.