Tencent Holdings Ltd. shares fell a second day on concern regulators are now turning their sights to Pony Mas business empire, fueling a $62 billion wipe-out that one brokerage says obliterated most of the value of its online finance business.

The stock fell more than 4% in Hong Kong on Monday, following a 4.4.% drop on Friday. Chinas top financial regulators see Tencent as the next target for increased supervision after the clamp down on Jack Mas Ant Group Co., people with knowledge of their thinking have said. Like Ant, Tencent will probably be required to establish a financial holding company to include its banking, insurance and payments services, according to one of the people.

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Tencent Said to Face Broad China Clampdown on Fintech, Deals

The internet giants payments and fintech business is worth between $105 billion to $120 billion, according to estimates by Bernstein analysts including Robin Zhu, who assigned a multiple of up to 8 times to the divisions trailing 12-month revenue of 100 billion yuan ($15 billion). That would imply the payments business is worth about $70 billion to $80 billion, with credit, wealth management and insurance accounting for the remaining $35 billion to $40 billion.

All else equal, we think it could be argued that Tencents fintech business is now valued at almost zero, the Bernstein analysts wrote in a research report, citing Fridays loss. This is significant, as it implies any further declines from here would essentially imply a de-rating of the Tencent multiple.

A move against Tencent would mark a significant escalation in Chinas campaign against the unfettered expansion of its technology giants. Premier Li Keqiang pledged at the National Peoples Congress earlier this month to expand oversight of financial technology, stamp out monopolies, and prevent the unregulated expansion of capital.

Tencents regulatory woes goes beyond its fintech business. The antitrust regulator on Friday

fined the company, along with some of Chinas other tech behemoths, for not seeking prior approval for earlier investments and acquisitions. The market is also

concerned the government may step up a clampdown on digital gaming, according to UOB Kay Hian.

Ultimately though we consider the regulatory risk that Tencent faces in a very different light to the situation facing Alibaba, the Bernstein analysts said. We consider Tencent top managements low public profile helpful on the margin. More importantly, wed argue Tencents competitive position in its main businesses remain very solid, with relatively few obvious competitors in core profit-driving businesses.

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