Tencent 0700 02 (Jan 15 - Aug 18)

[winston]

not vested

Chinese social media and gaming leader Tencent (700) recently acquired a 5 percent stake in US electric car maker Tesla for US$1.8 billion (HK$14 billion).

Some viewed this as undisciplined, but other giants, Apple and Google, have also been involved in Tesla.

Tencent is the most valuable tech firm in China, and the country is the world's biggest auto market. Selling electric cars in the mainland will be big business.

Yesterday, Tencent's share price once hit an HK$230.20, before closing at HK$228, up 0.8 percent.

Morgan Stanley maintained a buy rating on the stock, with a target price of HK$255.

Source: Dr Check, The Standard

[winston]

not vested

Tencent posts strong results

Tencent Holdings (0700) posted quarterly sales and profit that topped all analyst estimates as blockbuster titles, including Honour of Kings, drove a billion-plus users on WeChat and QQ to spend on game items.

Revenue climbed to 49.6 billion yuan (HK$56.08 billion) in the three months ended March, the Shenzhen-based company said yesterday. Net income climbed to a record 14.5 billion yuan.

China's internet titans are defying a slowdown in the world's second largest economy. Chairman Pony Ma Huateng is now bolstering a US$300 billion (HK$2.34 trillion) empire that encompasses everything from online gaming and social media to film and TV production.

Tencent's adapting a plethora of hit novels and anime into mobile games, distributed via messaging services WeChat and QQ, aimed at safeguarding its dominance of domestic media.

Shares of Tencent inched 0.4 percent higher before earnings were announced. The stock has gained 37 percent this year, compared with a 41 percent rise for New York-listed rival Alibaba Group Holding. Naspers , which owns a significant stake in Tencent, was up 2.2 percent in early trade in Johannesburg.

WeChat had 937.8 million monthly active users and the mobile version of QQ had 678 million users at the end of the quarter.

Revenue from value added services, which includes online games and messaging, soared 41 percent to 35.1 billion yuan. Of that total, online game revenue grew 34 percent to 22.8 billion yuan.

Tencent rode a strong showing from Honour of Kings. Developed in-house, the hit title is a mobile battle game similar to the world's most popular desktop title League of Legends - also owned by Tencent. It topped both revenue and downloads in Apple Inc's iOS store in March, according to App Annie.

Meanwhile, Tencent Music Entertainment Group and Universal Music signed a licensing agreement to expand the Chinese music market. Under the deal, Tencent will be able to stream music from Universal's record labels and global recording stars.

Source: The Standard

[winston]

not vested

Tencent (700) is now the largest company in Hong Kong with a market cap of HK$2.6 trillion, accounting for 16 percent of the total market value of 50 Hang Seng index stocks.

In mid- June, its weighting in the index will be lowered to 10 percent. Its share price rallied 45 percent this year to HK$280.60, yesterday's intra-day high, and also another all-time high.

Long-term investors should keep holding the share as it is still a high growth stock. But, as it has been overbought with 14-day RSI at 87, we should wait to buy on dips.

Source: Dr Check, The Standard

[winston]

not vested

Executive director Martin Lau Chi Ping recorded his highest sale price in Tencent Holdings since he started selling the Company’s shares in 2007.

Tencent shares have risen by an average of 20 per cent, six months after the director sold shares based on 205 disposals since 2007. The stock recorded a price gain six months after on 75 per cent of those disposals.

Lau sold 600,000 shares sold on May 29 at HK$274.79 each. The trade reduced his holdings to 47.568 million shares or 0.5 per cent of the issued capital. The sale was made on the back of the 13 per cent rise in the share price since May 4 from HK$243.80.

He previously sold 800,000 shares from April 3 to 5 at an average of HK$225.51 each. Prior to his sales this year, the director sold 1.3 million shares in August 2016 at an average of HK$201.16 each, 600,000 shares in July 2016 at HK$178.55 each and 1.4 million shares in March 2016, some of which were options-related sales, at an average of HK$158.71 each. Prior to his disposals since 2016,

Lau sold 34.1 million shares from September 2007 to November 2015 at HK$7.84 to HK$157.70 each or an average of HK$49.69 each. Lau joined the Group in 2005. The blue chip closed at HK$270.00 on Friday.

Source: SCMP

[winston]

not vested

Tencent: Why It’s a Buy

By Robert Guy

Chinese internet giant Tencent (700.HK) has been added to UOB Kay Hian's top picks for June, with the broker seeing around 14% upside.

Here's why Tencent made the list:

We estimate its PC game segment to slightly re-accelerate growth to 11% yoy in 2017 (2016:+8%), driven by new PC games and eSports.

We forecast online gaming revenue to grow 28% yoy in 2017, driven by a 65% yoy growth in mobile gaming.

We forecast a 49% yoy growth in Tencent’s advertising revenue in 2017, benefiting from WeChat being well positioned to capture advertising needs through Moment ads, outpacing the average growth of its Chinese Internet peers.

In 1Q17, the third-party online payment market size was Rmb1.9t. Alipay is still leading the online payment market with a 53.7% share (4Q16: 54.1%), followed by Tenpay’s 39.5% (4Q16: 37.0%).

Tenpay’s mobile payment MAU and average daily payment transactions exceeded 600m in Dec 16. The market expects Tenpay may outpace Alipay in 2018 with a higher growth rate.

We forecast a 123% yoy growth in other revenues (payment and cloud), driven by increasing withdrawal fees, customer conversion, and expanding offline payment scenarios through WeChat Mini Programmes.

We expect the cloud business will continue to show the fastest growth among Tencent’s businesses for a few years and expect operating margin for the segment at negative single digit in 2017.

We model in revenue CAGR of 21% and EPS CAGR of 26% for 2017-20. Our target price of HK$312.00 is based on the SOTP model.

Tencent last traded at HKD273 a share. The stock is up 44% this year.

Source: Barron's Asia

http://www.barrons.com/articles/tencent ... 1496736811

[winston]

not vested

<Research Report>M Stanley Reiterates TENCENT as Top Pick for CN Internet Biz; Expects Strong Growth for Honor of Kings to Continue in 2H

Morgan Stanley, in its report, said TENCENT (00700.HK)'s mobile game "Honor of Kings" continued to outperform in May and its another mobile game "Legacy TLBB" was shelved on 16 May, which soon became market focus, ranking the third place of iOS download list.

Tencent was the top pick of Morgan Stanley with rating Overweight and target price of $310 on expectation of continuous strong performance of "Honor of Kings" in the second half of the year.

Source: AAStocks Financial News

[winston]

not vested

Tencent 腾讯 (700 HK)

China's online game sector grew at a 28% CAGR in the past five years while the growth is expected to slow down to mid to low teens in the coming years.

However, we believe the sector will continue to benefit from the elaborate operation, overseas expansion and increasing average rate per user, and the leading game companies are likely to continue to expand market share.

We like Tencent as the company has established a clear No.1 position in China’s PC and mobile game markets with revenue shares of 69% and 25% respectively in 2016.

In addition to games, we see multiple growth drivers of mobile gaming, P4P Ads, payments and Cloud to maintain long-term ecosystem growth.

We suggest a BUY recommendation with a target price of HK$312.00.

Source: UOBKH

https://www.tencent.com/en-us/index.html

[winston]

not vested

Leveraging on the strong distribution capacity and strategic corporation with Kingsoft
(3888 HK) and Changyou (CYOU US), Tencent gained five positions in AppAnnie’s top 10
rankings in mobile games in June.

We forecast online gaming revenue to grow 28% yoy in 2017, driven by a 65% yoy growth in mobile gaming. We also estimate PC game revenue growth to slightly reaccelerate to 11% yoy in 2017 (2016: 8%) on encouraging 1Q17 results, driven by new PC games and eSports.

We forecast Tencent’s advertising revenue to grow 49% yoy in 2017, benefiting from WeChat being well positioned to capture advertising needs through Moment ads, outpacing the average growth of its Chinese Internet peers.

We forecast a 123% yoy growth in other revenues (payment and cloud), driven by increasing withdrawal fees, customer conversion, and expanding offline payment scenarios through WeChat Mini Programmes.

We expect the cloud business will continue to show the fastest growth among Tencent’s businesses for the next few years and expect the operating margin for the cloud business to be negative single-digit in 2017. We forecast revenue CAGR of 21% and EPS CAGR of 26% for 2017-20.

Share Price Catalyst
Event: Strong online game revenue growth driven by HoK, DNF and TLBB; increasing ad
load in moment ads; and strong monetisation in the payment and cloud businesses in the
long run.

Timeline: Aug 17

Source: UOBKH

[winston]

not vested

Tencent Slumps After People’s Daily Calls Honor of Kings Game ‘Poison’[/b]

By Robert Guy

Tencent (700.HK) shares took a beating on Tuesday afternoon after the People's Daily newspaper called its popular game Honor of Kings game "poison".

The sharp criticism of Tencent, which has more than 900 million users of its WeChat messaging app, raised concerns Beijing could be set to crackdown on the online games industry, which are a big revenue generator for Tencent.

The game has more than 80 million daily active users, which means one in every 17 Chinese person is playing the game at any time.

Tencent has imposed a one-hour a day limit on the playing of the games by children younger than 12, while children between 12 and 18 are limited to two hours a day.

China has overtaken the U.S. to become the world's largest online gaming market and some analysts expect the market to be worth $30 billion by 2018.

Source: Barron's Asia

http://www.barrons.com/articles/tencent ... 1499156127

[winston]

not vested

Tencent loses US$17.5 billion in market value after People’s Daily describes its game as ‘poison’

Honour of Kings has more than 200 million players

Honour of Kings’ generated more than 5.5 billion yuan (US$809 million) in first-quarter revenue. That accounted for 43 per cent of the 12.9 billion yuan of revenue that Tencent earned from smartphone games in the same period.

China is the world’s largest gaming market by revenue, and is expected to make up about a quarter of global game sales in 2017

Source: SCMP

http://www.scmp.com/business/china-busi ... ples-daily