Chinese gaming stocks jump after Beijing approves new games

Since April 2022, Chinese regulators have started approving video games again after a months-long freeze due to signs of easing Beijing’s crackdown on games.

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Shares in Chinese game companies rose on Wednesday after regulators approved a slew of new games, a sign that some of the headwinds to the sector may be easing.

The list released on Tuesday by China’s National Press and Publication Administration does not include permission to play games from the giants. tencent as well as NetEase.

Tencent’s shares were flat in Hong Kong trading, but continued game approvals, which resumed in April after a months-long freeze, lifted shares of other companies.

Hong Kong-listed NetEase shares rose almost 3% in the afternoon, while the streaming giant Bilibili grew by more than 4%. In the last tranche, Bilibili had two games approved.

Stock Kingsoftanother publisher, were also higher in Hong Kong trade.

Meanwhile, a subsidiary of ByteDance, the owner of TikTok, has also approved the game. headquarters in Beijing ByteDance leads the aggressive game in the online gaming sector thanks to acquisitions that have helped boost player spending.

In China, games must be approved by regulators for release and monetization.

Beijing has targeted the games as part of its scrutiny of technology companies over the past year and a half. China introduced rules last year game time limit for online games for children under 18 up to a maximum of three hours per week. Regulators subsequently froze approval of new games for several months.

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This has had a big impact on companies that rely heavily on games. China’s largest gaming company Tencent reports slowest revenue growth ever in the first quarter of this year.

But three rounds of gaming clearances since April show the crackdown may be easing.

“We believe two consecutive months of approvals should allay market concerns about industry trends,” Jefferies equity analyst Thomas Chong said Tuesday.

Chong noted that Tencent, NetEase and Bilibili are among the companies “that would benefit from greater transparency in game permissions.”

Daniel Ahmad, senior analyst at Niko Partners, said the return of approvals to one installment per month is “a positive sign for the industry,” but noted that this only applies to domestic games.

“Based on historical precedent, we expect the first batch of imported games to be approved in the near future,” referring to games developed by foreign publishers.