Tencent and NetEase Stocks Take a Hit After China’s Gaming Ban

Tencent and NetEase have both taken a hit to their stock price following China’s decision to limit how much time minors can spend gaming....
Tencent and NetEase Stocks Take a Hit After China’s Gaming Ban
Written by Matt Milano

Tencent and NetEase have both taken a hit to their stock price following China’s decision to limit how much time minors can spend gaming.

China made headlines when its National Press and Publication Administration (NAAP) limited minors to only three hours of video gaming a week. Kids will only be able to play one hour a day, Friday through Sunday, as well as during holidays.

According to CNBC, Tencent and NetEase, the country’s two largest gaming companies, have both seen their stock fall roughly 3% in the aftermath of the the NAAP’s decision. Despite the hit, analysts don’t believe there will be major impact long-term.

“We estimate about 5% of gaming revenue comes from minors under 18 years old, and we believe there is about 3% earnings impact to Tencent if we assume gaming contributes about 60% of total earnings,” investment bank Jefferies said in a note, seen by CNBC.

“Minors represent low singe digits of NetEase’s gaming revenue,” the analysts continued.

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