Tencent 0700 02 (Jan 15 - Aug 18)

[winston]

not vested

<Research Report>Citi: TENCENT Strengthens Social Entertainment Ecosystem, Retaining User Stickiness

Citigroup, in its report, said that TENCENT (00700.HK)'s QQ team demonstrated its Entertainment Quotient Plan during the 2016 Global Partner Conference last week and Tencent plans to invest RMB1 billion into the plan over the next three years with the collaboration with more than 1,000 partners to establish latest social entertainment ecosystem.

The group will integrate digital content with QQ platform which provides multifaceted content to users.

The research house set the target price of the heavyweight at $230, with a rating of Buy.

The broker believes that EQ Plan is the continuous effort of the group which ensures QQ and other social networking platforms to have attractive entertainment content that will help retain the loyalty of users.

Source: AAStocks Financial News

[winston]

not vested

<Research Report>Deutsche Lifts TENCENT Target to $246; Expects Tenpay Revenue to Grow Rapidly

Deutsche Bank, in its report, said TENCENT (00700.HK)'s Tenpay is an ideal online ecosystem, posting rapid growth in the past two years.

The broker's survey found out that 70.9% and 30.7% of respondents intend to increase their usage frequency of WeChat Pay and QQ Wallet over the next 2 years.

The broker lifted the target price of Tencent from $229 to $246, with rating Buy.

Tencent?s investments in a number of leading O2O platforms (Didi Chuxing, 58.com, Meituan) have helped Tenpay to be a major player in O2O.

Revenue CAGR of the coming 3 years (52%) will drive Tenpay contribution to Tencent revenues from a current 6% to 13% in 2020.

A shift to more lucrative B2C payments and easing in merchant acquisition should drive steady P&L improvements with Tenpay, while complementary financial services will drive growth in the long term.

Source: AAStocks Financial News

[winston]

not vested

<Research Report>G Sachs Lifts TENCENT TP to $256; Kept at Buy

Goldman Sachs, in its report, said that being the world's biggest mobile gaming company, TENCENT (00700.HK) is expected to post a robust performance in its game segment, thus the broker lifted the target price on Tencent by 20% from $214 to $256, equivalent to 28x P/E 2018 (estimate) (as compared to 28x P/E 2017), with rating Buy.

After acquiring Supercell, a mobile game developer, Tencent will promote Supercell's payment model in China for monetization.

Source: AAStocks Financial News

[winston]

not vested

Tencent ‘little program’ could revolutionize software business

China’s internet giant Tencent has rolled out a new platform called Xiaochengxu, or “little program”, which offers development tools for people to build sub-apps within its messaging platform WeChat.

Nowadays, everyone can be a writer or reporter using social networking platforms.

This little program may do the same to programming, allowing anyone to easily create and post their programs on a platform and share them through WeChat.

It is said that programmers using the platform can also tap into Tencent’s big data.

Mobile apps and software we use everyday are all programming products.

In the past, one had to start a firm if they wanted to develop such products and sell them to the public.

They must also manage different operational and business issues.

Little Program is supposed to take care of all that, essentially removing a major barrier for startups.

The market potential can be huge if people can come up with all kinds of software to help solve daily problems, like making it easier to book an appointment with a doctor, or providing instant translation service for mainlanders as they travel abroad.

The project is still in its infancy. But if one day it becomes a big ecosystem, it could generate serious money for Tencent as it could charge for the storage service it provides and the internet traffic it channels to the platform.

Tencent could also earn fees for providing online security and marketing services as well as charge for access to its pool of big data.

Also, through the platform, the tech giant may discover startups with big potentials and get the chance to buy them out.

Such an initiative will also benefit China.

Since the country is losing its cost competitiveness to other emerging countries as it gradually runs out of cheap labor, tapping on tens of millions of software engineers it has trained up in recent years might be its best calling card in the internet era.

Source: EJ Insight

http://www.ejinsight.com/20161024-tence ... -business/

[winston]

not vested

WeChat and Alipay top the list of the most relevant brands in China. The latter is a social media platform operated by Tencent that can also handle digital payments and e-commerce from 700 million of its monthly active users.

As for the financial potential of these giants, Tencent's interim profit to June 30 rose 40.3 percent year on year while revenue increased 47 percent.

Second- quarter monthly active users of Weixin and WeChat together grew 36 percent, and online advertising and games revenues are likewise growing massively.

HSBC Global Research has lifted its target for Tencent to HK$256 and maintained its "buy" rating. It notes too that the WeChat app occupies pride of place for mobile internet, with over 50 percent of 800 million users spending over an hour a day on the app.

Source: Dr Check, The Standard

[winston]

Tencent takes hit on Trump

by Daisy Wu

Shares of Tencent Holdings (0700) fell 3.7 percent to HK$192.6 yesterday, hitting a three month low, after HK$984.5 million worth of stock of the tech giant were short sold.

The worst performing blue chip yesterday, Tencent contributed to a 83 point drop in the benchmark Hang Seng Index, which closed 308.87 points lower. The shares accounted for 12 percent of market turnover.

Analysts said the drop was driven by global capital reallocation to financial, infrastructure, material and biotechnology sectors following Donald Trump's victory in the US presidential election, rather than a fundamental change in the company.

"Donald Trump is expected to loosen the financial regulation. Institutional investors are offloading their holdings in the technology sector and shifting the money to financial sectors," said Castor Pang Wai-sun, head of research at Core Pacific-Yamaichi International.

Ample Capital director Alex Wong Kwok-ying opined: "I think capital has been keeping flow into the tech sector for seven years, which has been overvalued while the biotechnology sector has been undervalued. But now the biotech sector seems less risky."

Pharmaceutical and biotechnology shares soared after Trump's victory as investor fears of possible tough action by his rival Hillary Clinton on drug pricing was removed.

Shares of commodities after Trump proposed a "US$1 trillion over a 10-year period" infrastructure stimulus plan in his victory speech.Both Pang and Wong believe there is no tech bubble burst similar to the one in 2000.

"Back in 2000, many tech firms even did not have turnover. But the profit and cash flow of Tencent are sustainable," said Pang.

The two analysts, however, think short selling of Tencent would last for a certain period. "It's certain that institutional investors have not gotten their position adjustment done," said Pang.

"The bearish scenario is that the drop would last until Trump enters the White House two months later," said Wong.

Pang suggests investors who like bargain hunting have now adopted a wait-and-see position to see if the share price will drop below HK$179. Wong warns Tencent's share price can fall a further 5-10 percent.

Tencent is due to report three-month results tomorrow.

The market expected its third- quarter adjusted net profit to jump 54 percent year-on-year to 11.7 billion yuan.

Source: The Standard

[winston]

not vested

Tencent will reveal its third quarter earnings tomorrow.

It fell 3.7 percent yesterday to HK$192.60.

But brokerages still target the stock within HK$230 to HK$280.

You should not be in a hurry to buy. I would highly recommend buying Tencent when its straddles between HK$170 to HK$180, which is near its 250-day moving average.

Source: Dr Check, The Standard

[winston]

not vested

Maintain OUTPERFORM rating and TP of HK$232, implying 34x 17E diluted adjusted P/E.

Our TP includes
(1) internet finance valuation of HK$24.20/sh, and
(2) core business valuation of HK$207.8/sh, based on 31x 17E P/E, parallel with other global internet giants.

Source: CS

[winston]

not vested

<Research Report>C Suisse Expects Tencent 3Q Adjusted EPS to Rise 42% YoY, Rated Outperform

Credit Suisse, in a report, said that TENCENT (00700.HK) will release its third quarter results of 2016 on 16 November.

It is expected that revenue could rise 44.1% yearly to RMB38.3 billion.

Adjusted EPS is expected to gain 42.1% to RMB1.23, in line with estimates.

Revenue is anticipated to see a quarterly rise of 4% to approximately RMB10 billion.

The broker maintained the rating at Outperform, with a target price of $232.

Source: AAStocks Financial News

[winston]

not vested

Tencent takes hit on Trump

by Daisy Wu

Shares of Tencent Holdings (0700) fell 3.7 percent to HK$192.6 yesterday, hitting a three month low, after HK$984.5 million worth of stock of the tech giant were short sold.

The worst performing blue chip yesterday, Tencent contributed to a 83 point drop in the benchmark Hang Seng Index, which closed 308.87 points lower. The shares accounted for 12 percent of market turnover.

Analysts said the drop was driven by global capital reallocation to financial, infrastructure, material and biotechnology sectors following Donald Trump's victory in the US presidential election, rather than a fundamental change in the company.

"Donald Trump is expected to loosen the financial regulation. Institutional investors are offloading their holdings in the technology sector and shifting the money to financial sectors," said Castor Pang Wai-sun, head of research at Core Pacific-Yamaichi International.

Ample Capital director Alex Wong Kwok-ying opined: "I think capital has been keeping flow into the tech sector for seven years, which has been overvalued while the biotechnology sector has been undervalued. But now the biotech sector seems less risky."

Pharmaceutical and biotechnology shares soared after Trump's victory as investor fears of possible tough action by his rival Hillary Clinton on drug pricing was removed.

Shares of commodities after Trump proposed a "US$1 trillion over a 10-year period" infrastructure stimulus plan in his victory speech.Both Pang and Wong believe there is no tech bubble burst similar to the one in 2000.

"Back in 2000, many tech firms even did not have turnover. But the profit and cash flow of Tencent are sustainable," said Pang.

The two analysts, however, think short selling of Tencent would last for a certain period. "It's certain that institutional investors have not gotten their position adjustment done," said Pang.

"The bearish scenario is that the drop would last until Trump enters the White House two months later," said Wong.

Pang suggests investors who like bargain hunting have now adopted a wait-and-see position to see if the share price will drop below HK$179. Wong warns Tencent's share price can fall a further 5-10 percent.

Tencent is due to report three-month results tomorrow.

The market expected its third- quarter adjusted net profit to jump 54 percent year-on-year to 11.7 billion yuan.

Source: The Standard

http://www.thestandard.com.hk/section-n ... ?id=176329