Core Viewpoint - The leading technology and internet stocks in Hong Kong, particularly Tencent Holdings, are experiencing a continued decline in stock prices, influenced by market rumors regarding potential tax increases on internet value-added services and other underlying factors [1][2]. Group 1: Stock Performance - Tencent Holdings' stock price fell to 542 HKD per share as of February 5, 2026, with a market capitalization of approximately 4.94 trillion HKD, down from a peak of 625 HKD per share in late January 2026 [1]. - Other Hong Kong tech stocks, such as Alibaba-W and Kuaishou-W, also saw declines exceeding 3% on February 5, 2026 [1]. - Despite a net inflow of approximately 22.31 billion HKD and 11.71 billion HKD from southbound funds into Tencent and Alibaba, respectively, the market remains volatile [1]. Group 2: Market Influences - The recent stock volatility is attributed to rumors of potential tax increases on internet value-added services, which have caused market sensitivity regarding future tax policies, including the possibility of a "digital tax" or tiered corporate income tax [1][2]. - Tencent is currently in a buyback blackout period, which has removed a key support mechanism for its stock price, making it more vulnerable to bearish market movements [2]. - The company has conducted over 40 buybacks since November 18, 2025, totaling more than 25 billion HKD, with the last buyback occurring on January 15, 2026, at prices between 619 HKD and 632 HKD [2]. Group 3: Business Fundamentals - Despite the stock price decline, Tencent Holdings continues to show robust fundamentals, with double-digit revenue growth reported in its Q3 2025 results, driven by AI technology enhancing advertising precision and gaming engagement [3]. - As one of the largest weighted stocks in the Hong Kong market, Tencent's performance significantly impacts the Hang Seng Tech Index [3]. - The company's ability to rebound in the spring of 2026 may depend on the upcoming earnings season [3].