Tencent’s $112-billion rally surprises analysts

Tencent Holdings Ltd.’s analysts, who have a history of being too bullish, have now been caught off guard by a rally that’s gathering pace in Asia’s biggest stock.

Shares of the Chinese Internet giant are closing in on analysts’ consensus target price, something which hasn’t happened in nearly two years. It’s the most-loved stock in Hong Kong, as none of the 57 analyst ratings tracked by Bloomberg recommend selling the shares. Of the 50 bullish analysts, more than one-third have a 12-month price target that lags its current price.

Tencent has jumped about 30% since an October low, adding some $112 billion to shareholder value. The share price topped HK$405 on Monday for the first time since 2018, the price at which its biggest shareholder sold about $10 billion worth of shares early that year. It was Hong Kong’s biggest-ever secondary offering at the time.

Tencent rose as much as 1.6% Tuesday to HK$413 before reversing gains. A series of block trades totaling almost 1 million shares crossed Tuesday morning at around HK$402, suggesting some shareholders are making the most of the rally to take profit.

The stock is trading near the most overbought level since late 2017.

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Tencent’s $112-billion rally surprises analysts