0847 GMT - The selloff in Chinese online gaming stocks on speculation of higher value-added tax is unwarranted, Citi analysts say. Concerns were triggered after China's three telecom operators announced changes to VAT treatment, with some telecom services reclassified into higher tax bracket, lifting VAT to 9% from 6%. The move raised fears that higher taxes on online gaming virtual item sales could also rise, dragging shares of Tencent down 2.9% and Bilibili 1.4% lower. Citi says those concerns are misplaced, noting that sales of intangible assets, including gaming virtual items, remain subject to a 6% VAT. Citi says the pullback may offer a buying opportunity and reiterates its buy ratings on Tencent, NetEase and Century Huatong. (sherry.qin@wsj.com)
(END) Dow Jones Newswires
February 03, 2026 03:47 ET (08:47 GMT)
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