NetEase, Tencent shares rebound after China voices support for gaming industry
By Barbara Kollmeyer
Recently beaten-down China online gaming stocks rebounded on Wednesday in Hong Kong on news of a more conciliatory tone on the sector by the country's top gaming regulator.
Shares of NetEase Inc. (NTES) and Tencent Holdings Ltd. (HK:700) climbed 11% and 4%, respectively in Hong Kong.
In U.S. trading, NetEase failed to get a lift, falling 4% and rival gamer Huya Inc. (HUYA) slipping 0.7%, even after both rose in premarket trading. Tencent is the parent of Tencent Music Entertainment Group (TME), whose U.S.-listed shares were up 0.5%.
NetEase stock lost 24% of its value on Friday, with Tencent sinking 12% and Huya 10% after China's National Press and Publication Administration proposed curbing excessive spending on games by consumers, specifically younger players, and bans on rewards.
The draft rules also said gaming content should be prohibited from leaking "state secrets," as the regulator opened the proposals to public comment Jan. 22, 2024.
On Monday, though, the regulator made a statement on WeChat that 105 new online games had been approved for December by the Game Working Committee of China Music and Digital Association, calling that "positive signals that support the prosperity and healthy development of the online game industry."
China shares have been some of the worst performers in Asia and globally in 2023 - the Hang Seng HK:HSI is down 16%, and set for its fourth straight losing year. The index bounced 1.8% on Tuesday.
The government has periodically cracked down on the gaming industry in recent years, with concerns particularly focused on youth addiction and vision problems. A freeze on new games was imposed in 2021, then lifted later in 2022 for Tencent and NetEase.
-Barbara Kollmeyer
This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
12-27-23 1007ET
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