After three straight years of decline, Chinese tech company Tencent is poised for gains in 2024. The stock is up more than 3% so far this year, in contrast to a more than 4% decline in Hong Kong's main Hang Seng index. Tencent, largely known for its gaming and social media businesses, is the largest stock in the index with a market capitalization of more than $350 billion. The first quarter should “mark the low point” in Tencent's games business, Morgan Stanley equity analyst Gary Yu and a team said in a report on April 14. That said, our previous expectation that a turning point will occur in the second quarter remains intact.” The company is overweight Tencent shares, with a price target of 400 Hong Kong dollars ($51). That is more than 30% higher than where the share closed on Friday. Chinese authorities will resume approving Tencent's games in late 2022 after a freeze of more than a year. When asked about the risk of new restrictions in late March, management said regulators have made it clear that they intend to “provide a healthy environment for industry growth rather than restricting the industry.” ” That's according to a FactSet transcript of an earnings call. Most of Tencent's profits this year came after that quarterly earnings report. The company's other major revenue sources are advertising, financial technology and business services. “Among us [Asia ex-Japan internet] Tencent's equity coverage is our top pick given its diversified business models and margin expansion story,” Jefferies analysts said in an April 17 note about their meetings with European investors over the past week. Also reflecting analysts' optimism about the stock is boosted by Tencent's stock. Morgan Stanley's Yu pointed out that Tencent has announced it would buy back at least $13 billion in 2024 – more than double last year's buyback program – for a yield of about 5% in the year. Chinese company to fund its own share buyback program Prosus is a Netherlands-based company owned by Naspers, an early investor in Tencent, will be about double Prosus' share sales,' said Charlene Liu, HSBC's head of Internet and Gaming Research. , Asia Pacific, in a report on April 16 -January,” the report said. The investment firm also expects Tencent's gaming business to turn around quickly, albeit only in the second half of this year. “While there is an inability to undertake buybacks during the blackout period [one month before earnings] could weigh on the share price in the short term, a continued recovery in the games sector and resilient growth from advertising, fintech and business services could support earnings growth, supported by margin improvement,” the HSBC report said. Tencent will publish the first quarter. results on May 14. Chinese internet companies Alibaba and JD.com have also announced share buyback programs this year. “I think we're definitely seeing more mature performance or behavior patterns, especially for the list[ed] companies to do buybacks, to pay dividends,” Grant Pan, CFO of China-based asset management firm Noah Holdings, told me in an interview Friday. “In the past, it was very much a valuation-driven stock market,” he said. “But now I think people are really not just looking for the appreciation, but [the] true value of the company. Instead of looking for multiples, they look for the earning power.” Pan said low liquidity in Hong Kong has also affected share prices in that market, but he hopes this can improve with a new CEO. Bonnie Chan will become head of the company. Noah's customers have also started to inquire more about investing in China over the past two to three quarters, Pan said, noting that prices are approaching a level where there may be opportunities to do so -. CNBC's Michael Bloom contributed to this report.