Tencent 0700 02 (Jan 15 - Aug 18)

[winston]

not vested

Little Program raises big hopes for Tencent fix

by Daisy Wu


Shares of Tencent Holdings (0700) gained the most in seven weeks after the tech giant's announcement that the long- awaited Little Program feature of its popular messaging application WeChat would go live on January 9.

Its shares closed at HK$187.60 yesterday, posting the largest gain on the local bourse, following a 2.17 percent jump on Wednesday.

The Little Program aims to replace other apps to provide services and contents they offer. By scanning QR codes of the service or content providers, users would be directed to webpages where provided the same functions as apps.

The concept is to exempt users from the inconvenience of downloading and unloading apps.

But China International Capital Corporation (3908) believes the new function will do little help to boost the financial performance of Tencent in the short term. While it will increase users' degree of participation, Little Program will create a synergistic effect with its payment business development and monetization of advertising, the investment bank said.

The bank restated a long-term "buying" rating on the tech giant and sets the target price at HK$230, or 22 percent higher than the current level, citing its rich commercial ecosystem and the protection on users' experience as reasons.

CICC warned that shares of Tencent may come under pressure in the short term before market sentiment on it cools down, unless the tech firm can achieve exciting developments in its mobile game business or removes pressures on its earnings.

The strength in tech stocks outweighed the bearish hint from Wall Street, where stocks lost the most in two months overnight, supporting the local stock market.

The Hang Seng index rose 0.2 percent to 21,790.91, while the China Enterprises Index closed 0.1 percent higher at 9,312.76 points.

The market received some support from mainland investors, who spent 3.7 billion yuan (HK$4.13 billion) buying Hong Kong shares via the Shanghai- Hong Kong Stock Connect scheme.

Source: The Standard

[winston]

Tencent, NetEase eye global breakthroughs in mobile gaming

Tencent generated revenue of 40.39bn yuan in the three months to September 30, including 18.17bn yuan from its online and mobile games business

Shenzhen-based Tencent is banking on its acquisition last year of a controlling interest in Finnish mobile game developer Supercell to push its initiatives worldwide

Internet giant Tencent, which also operates popular social messaging platforms QQ and WeChat, generated total revenue of 40.39 billion yuan (HK$45.09 billion) in the three months to September 30, including 18.17 billion yuan from its online and mobile games business.

Source: SCMP

http://www.scmp.com/tech/china-tech/art ... ile-gaming

[winston]

Tencent Shares Losing $35 Billion Shows Depth of China Pessimism

by Kana Nishizawa

The Shenzhen-based technology giant has tumbled 13 percent from its September record, wiping $35 billion off the value of its shares, as overseas funds pulled money from Hong Kong and Chinese equities.

The company’s large weighting on the Hang Seng Index -- at 10 percent -- helped make Hong Kong’s benchmark stock gauge one of the world’s worst performers last quarter.

Investors pulled about $409 million from exchange-traded funds that buy Chinese and Hong Kong stocks in the week through Dec. 21 as concern grew over a weakening yuan and tighter liquidity.

Source: Bloomberg

http://finance.yahoo.com/news/tencent-s ... 40088.html

[winston]

not vested

Tencent Holdings
Maintain OUTPERFORM
Mini Programs: A layer of new soil in the spring

Tencent will officially launch its "Mini Programs" on 9 Jan, which has been a very popular topic among developers and brands with
meaningful online presence in the past several weeks.

Is Mini Program too hyped by the market? We think in the short term perhaps yes, but in long-term Tencent does have a shot to establish another ecosystem enabling more online-to-offline interactions.

Key difference would emerge when:
(1) killer apps like Red Envelope emerge;
(2) no. of programs and engagements reach critical mass to enable future commercial opportunities (such as search).

Mini Programs won't contribute much into Tencent's print in the next two years, except for some sentiment boost if all goes well.
2017 would still be about further deepened monetisation on its mobile assets, especially from WeChat performance-based ads.

Maintain OUTPERFORM and with TP of HK$233, implying 34x FY17E diluted adjusted P/E.

Our TP includes:
(1) internet finance valuation of HK$24.2/sh, and
(2) core business of HK$208.8/sh, based on 30x FY17E P/E, in line with global internet giants.

Source: CS

[winston]

not vested

<Research Report>M Stanley: Tencent Ad, Payments Biz See Lots of Growth Room

Morgan Stanley, in its report, said the vast and sticky social platforms' user base of TENCENT (00700.HK) is the firm's core asset, with 846 million monthly active users (MAU) in 3Q16 on Weixin and WeChat (up 30% yearly).

This core asset enables it to sustain long-term growth as it gradually unveils innovative monetization plans for gaming, advertising and payments.

The monetization process for advertising, and,especially, payments, is still in the initial stage, implying ample room for growth.

The broker rated the stock Overweight, with target price of $230.

The broker expected a healthy 16% online gaming sales CAGR in 2016-18 and mobile game sales to rise at a 33% CAGR in 2016-18, driven by a rich mobile gaming pipeline for both in-house and licensed games.

Tencent has built an extensive mobile advertising property ecosystem,and the monetization process is still in its early stages, (i.e., WeChat Moments).

Strong performance ads should drive a 35% ad sales CAGR in 2016-18 (slightly below market consensus of 40-50%), with gross margin at about 40% vs. 49% in 2015 due to content investments.

Tencent is well positioned in the mobile payments space. The broker projected Tencent's revenue from payments to rise at a 48% CAGR in 2016-18, making up 15% of 2018 sales vs. 3% in 2014.

Source: AAStocks Financial News

[winston]

not vested

<Research Report>Nomura Lifts TENCENT (00700.HK) Target to $252 on Solid Prospect

Nomura, in its report, expected the 4Q16 revenue of TENCENT (00700.HK) to rise by 44% yearly to RMB43.8 billion; and EPS to grow 30% yearly to RMB1.23.

The broker believed mobile gaming revenue will soften in 4Q16, while P4P advertising revenue remained strong.

Dividends from Supercell should lift Tencent?s FY17 earnings by 5%.

The broker kept the rating Buy with target price lifted from HK$240 to HK$252.

Nomura forecasted Tencent?s mobile gaming revenue growth will soften to 1% quarterly/ 41% yearly at RMB10.1 billion.

However, Nomura believed the momentum should pick up again in 1Q17 as mobile games revenue brought by Honor of King, whose gross billing likely hit a record of RMB1.5 billion, has driven by 33% monthly growth in the game?s daily active users.

On PC gaming revenue, the broker expected a 1% quarterly / 8% yearly growth in 4Q16 at RMB12.1 billion.

The broker also expected strong 77% yearly growth in P4P ads revenue to RMB5.2 billion. Tencent?s display ads likely continued to slow, with 19% yearly growth. However, gross margin on online advertising likely improved by 200bps quarterly in 4Q16.

Source: AAStocks Financial News

[winston]

Tencent sued for patent infringement

by Dominique Nguy

Technology giant Tencent Holdings (0700) was sued by Gmedia Technology in Hong Kong and in the mainland over the use of two dimensional code technology in its WeChat products.

Gmedia filed legal proceedings against Tencent in Hong Kong's High Court and asked the tech giant to stop its patent-infringing activities.

Gmedia did not specify the amount of compensation it was seeking, but said Tencent now had a big user base.

Separately, UnionPay will acquire a stake in Wanda Internet Technology Group. The effort could put Wanda and UnionPay in competition with entrenched payment platforms like Alibaba Group Holding affiliate Alipay and Tencent Holdings' WeChat Pay.

The partnership also comes after plans for Wanda's cooperation with Baidu, China's most-used search service, and Tencent, the country's biggest internet company, failed to materialize.

Source: The Standard

http://www.thestandard.com.hk/section-n ... 0303&sid=2

[winston]

not vested

Buy Tencent Ahead Of Earnings

By Shuli Ren

Tencent will report its December quarter earnings after the market close next Wednesday on March 22. Tencent may pleasantly surprise.

Citi‘s Alicia Yap wrote:

We expect the increasing traction of Honor of Kings benefiting from Tencent’s platform/social effects, decent grossing contribution from other existing big titles (JX Online, Dragon Nest, etc) as well as upcoming release of DNF Mobile and potentially Lineage 2 Revolution to be the key drivers for continued growth into 2017.

While Tencent is likely to report in-line revenue, its non-GAAP net income is likely to surprise, says Citi.

Source: Barron's Asia

http://blogs.barrons.com/asiastocks/201 ... -earnings/

[winston]

not vested

Internet giant Tencent to sharpen focus on advertising, new tech investments after record year

Tencent’s Honour of Kings smartphone game achieved a domestic record of more than 50 million daily active user accounts

Shenzhen-based Tencent posted a 43 per cent increase in net profit last year to 41.1 billion yuan (US$5.9 billion), up from 28.8 billion yuan in 2015, as its games revenue grew 16 per cent year on year and advertising turnover rose 19 per cent.

Total revenue soared 48 per cent to 151.9 billion yuan from 102.9 billion yuan a year earlier.
Its net profit missed the 44.1 billion yuan consensus market estimate from analysts polled by Bloomberg, but revenue was in line with the 152.1 billion yuan projection.

Source: SCMP

http://www.scmp.com/tech/article/208121 ... ecord-year

[winston]

not vested

Tencent set to turn page with IPO

Tencent (0700?is planning to spin off its e-book business as it boosts spending on payments and content, to lure users and keep them glued to its WeChat service.

An initial public offering of the Kindle-like business is planned for Hong Kong, the Shenzhen-based company revealed yesterday after posting quarterly earnings below some analysts' estimates.

Net income surged 47 percent to 10.5 billion yuan (HK$11.8 billion).

Chairman Ma Huateng is prepared for a hit to profit margins by investing in areas such as mobile payments, which he sees as critical to supporting users of services including WeChat and QQ.

Keeping customers engaged underpins its strategy to grow advertising and game sales, with the company recently unveiling "mini programs" that provide access to everything from ride- hailing to food delivery without quitting China's most popular instant message service.

"Tencent's payments services have been instrumental in helping its mobile games business generate money," said Benjamin Wu, an analyst at Shanghai- based consultancy Pacific Epoch. "Tencent is absolutely deploying the right strategy."

While revenue in the quarter climbed 44 percent to 43.9 billion yuan, costs jumped 60 percent to 20.2 billion yuan - almost half its overall sales.

"The payments service is treated as an infrastructure," Ma said. "That's why even as user numbers grow fast bank fees grow as well, so what we generate is similar to what we invest.

"A lot of our cloud business is also in the investment phase - that's why costs in the short term will be high."

Shares of Tencent in Hong Kong fell 1.6 percent to HK$225.20 before earnings were announced. The stock has gained 19 percent this year.

China Reading, as Tencent's literature unit is known, is said to have asked bankers to pitch for a role arranging an IPO that could raise about US$500 million (HK$3.9 billion).

President Martin Lau said it would also consider other spin-offs. The company also operates a music and video- streaming service.

Source: BLOOMBERG