South Korean game major Nexon Games Co. saw its shares surge nearly 10 percent on Friday morning following foreign media reports that Chinese tech giant Tencent Holdings Ltd. is considering acquiring Nexon Corp.

Nexon Games shares were trading at 16,760 won ($12.3) on the secondary Kosdaq market as of 10:51 a.m. on Friday, up 9.97 percent from the previous session.

The stock had jumped as much as 23.88 percent to 18,800 won earlier in the day on the Nextrade pre-market.

The rally comes after reports surfaced that Tencent is exploring the acquisition of Nexon for $15 billion to strengthen its gaming division. Reports noted that Tencent has approached the family of Nexon‘s late founder Kim Jung-ju to discuss a possible deal.

While concerns grow over increased Chinese influence in the Korean gaming industry should Tencent acquire Nexon, there is also optimism that the acquisition could facilitate Nexon’s entry and expansion in China.

Neither Tencent nor Nexon has issued an official statement regarding the reports.

Separately, shares of Poongsan Corp., a Korean defense and copper manufacturing company, also soared more than 16 percent on Friday amid analyst assessments that the stock remains undervalued compared to other defense stocks.

The stock was trading 16.1 percent higher at 101,700 won as of 10:54 a.m.

“While the 12-month forward average price-to-earnings ratio (PER) for major domestic defense stocks is about 30x, Poongsan trades at just 9 to 10x, making it the cheapest defense stock in the world,” said NH Investment & Securities Co. Analyst Lee Jae-kwang.

“Poongsan, Korea’s only ammunition manufacturer, recorded record earnings last year due to surging global demand and is expected to continue growing this year,” he added.

He raised Poongsan’s target price from 92,000 won to 115,000 won.

Auto-related stocks such as Hyundai Motor Co., in the meantime, lost ground on Friday after U.S. President Donald Trump hinted at the possibility of higher tariffs on imported cars.

Hyundai Motor shares were trading at 199,000 won as of 10:56 a.m., down 1.24 percent from the previous day.

The stock fell as low as 198,000 won shortly after the market opened.

Kia Corp. shares also dropped 1.32 percent to 97,100 won, while those of Hyundai Mobis Co. was down 0.7 percent.

Auto parts stocks also declined, with Sungwoo Hitech Co. falling 2.68 percent as of 10:57 a.m., SL Corp. losing 4.14 percent, and HL Mando Corp. down 4.53 percent.

Overnight, Trump stated at a bill-signing ceremony at the White House: “I imposed a 25 percent tariff on all foreign cars to protect our auto workers.

“I may raise that tariff even higher in the not-so-distant future,” he added.

Nexon Games finished at 16,840 won, up 10.50 percent from the previous session.

Shares of Poongsan closed 22.15 percent higher at 107,000 won.

Hyundai Motor ended the session at 199,000 won while Kia at 97,200 won, Hyundai Mobis at 282,000 won, Sungwoo Hitech at 5,740 won, SL Corp. at 31,050 won, and HL Mando at 33,100 won.

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