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<Research>Citi: Ratings Reiterated at Buy for TENCENT/ Others on Unwarranted Sell-off in CN Online Game Stocks
Recommend 11 Positive 18 Negative 10 |
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Yesterday (3rd), Chinese online game stocks were sold off, with market speculation attributing the volatility to a potential increase in value-added tax (VAT) on online game revenue, similar to telecommunications services, Citi Research issued a research report saying. However, the broker considered such speculation to be unfounded and lacking basis. The applicable VAT rate for the sale of intangible assets (including virtual items in online games) should be 6%, differing from the VAT rate adjustment for telecommunications services, according to documents from the State Administration of Taxation (SAT). Therefore, there is no basis for an increase, and the sell-off is unwarranted. Instead, the broker saw this as an enhanced buying opportunity. Citi Research reiterated ratings at Buy on TENCENT (00700.HK)/ NetEase (NTES.US)'s US stock/ CENTURY HUATONG (002602.SZ), with target prices of $783/ US$161. RMB24, respectively. AASTOCKS Financial News Website: www.aastocks.com |
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