Tencent Holdings (TCEHY) has enabled digital yuan payments on its chat app WeChat. Nikkei Asia reports that the app will be compatible with payments involving the digital yuan ahead of the Beijing Winter Olympics. TCEHY shares rose 1.47% to close at $57.15 on January 7.
Tencent is a Chinese investment company that offers value-added and advertising services. It makes money from display-based and performance-based advertisements. Tencent’s earnings report for Q4 2021 is scheduled for March 23, 2022.
Digital Yuan Support
The Chinese government intends to test the digital currency at Olympic venues when the Winter games start next month. Consequently, WeChat compatibility with the digital yuan should boost user convenience around the venues.
WeChat currently boasts 1.2 billion users who live predominantly in mainland China.
Users will simply have to download the e-CNY app to create a digital yuan wallet offered by WeBank, the Tencent-backed virtual bank. By linking the wallet to the WeChat account, users will enable payments.
Whether the digital yuan will compete or coexist with other smartphone platforms is still unclear. The fact that it is only available in certain cities and limited to a limited number of merchants and services could affect its use.
In November, Barclays analyst Jiong Shao reiterated a Buy rating on Tencent stock with a $79 price target, implying 38.23% upside potential to current levels.
Consensus among analysts is a “Moderate Buy” based on 1 Buy. Tencent’s Dividends have been increasing steadily over the past three years. Its dividend yield currently stands at 0.32%.
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