Tencent Holdings’ Ltd.'s headquarters in Shenzhen, China. Picture: BLOOMBERG
Tencent Holdings’ Ltd.'s headquarters in Shenzhen, China. Picture: BLOOMBERG

Hong Kong — Traders in China are unwinding positions in Tencent faster than ever, turning to other targets amid a lack of reasons to push Asia’s biggest stock any higher.

Mainland investors sold a net $81m worth of shares in the Chinese internet giant through trading links with Hong Kong on Tuesday, according to exchange data. That’s the 12th day of net selling in 13 days, bringing the total sold to more than $740m since May 10, or about 7.1% of their total holdings in the stock.

Tencent’s record quarterly profit and better-than-expected margins offered only a short-lived boost for its shares, which lost almost $100bn in value ahead of the results in mid-May. The stock is likely to hover around HK$400 on the expectation that gaming revenue will be weak this quarter, as the company does not plan to release any new titles, according to UOB Kay Hian analyst Julia Pan.

"Mainland investors are shifting their funds away from Tencent to some hot stocks in the market," said Shanghai-based Pan. "I wouldn’t suggest people buy the stock at the moment, given the gaming pipeline uncertainties. There’s a lack of catalysts."

Tencent has struggled to find buyers outside mainland China too. The stock has lost about two-thirds of a post-earnings rebound that briefly sent it above the HK$405 price at which a major shareholder sold a stake two months ago.

Turnover was about half the 2018 daily average in the past four days — including the quietest trading day since December on Tuesday — signalling interest in Asia’s tech darling was drying up.

The stock fell 0.8% to HK$402 in Hong Kong on Tuesday, its lowest close since May 16. Tencent hasn’t moved more than 1% in either direction for seven consecutive days, matching a similar dull streak in October.