Tencent's Wednesday selloff is an overreaction after a decent rebound in recent weeks, Citi analysts say in a research note. Despite 2Q gaming grossing likely slowing down due to soft seasonality, they note that deferred revenue recognition from previous quarters should support revenue for the period.

Citi expects Tencent's 2Q domestic games revenue to decline 3.9% on quarter but rise 8% on year. Short-term fluctuations in gaming grossing and revenue shouldn't overshadow the fundamental strength of Tencent's diversified and globalized gaming business, which underpins steady annual growth, they add.

Citi retains a buy rating on Tencent and suggests the selloff presents a buying opportunity.

As of press time, Tencent's stock price had risen by more than 1.7% during trading.

(END) Dow Jones Newswires