Tencent 0700 04 (Oct 21 - Dec 25)

[winston]

vested

JPM Assumes TENCENT's Earnings to Recover in 2H on Various Efficiency-enhancement Strategies

JPMorgan remarked that the growth outlook of the Chinese mobile game segment has further deteriorated, and remained relatively cautious towards the online game segment, as compared to other sub-segments of the internet sector (e-commerce, local services and advertising).

Among the online game stocks, the broker preferred TENCENT (00700.HK) over NTES-S (09999.HK) due to the former's earnings growth recovery in 2H22 and ads monetization from Video Accounts.

Related News- HSBC Global Research Hikes TENCENT (00700.HK) TP $500, Rating Reiterated Buy

JPMorgan remained upbeat on TENCENT for its various efficiency-enhancement strategies, which should propel its earnings recovery in 2H22.

Source: AAStocks Financial News

[winston]

vested

TENCENT(700)

Analysis：
Affected by domestic and foreign environments such as the epidemic and regulation, the company`s performance in the second quarter of 2022 declined, with revenue down 3.14% year-on-year.

Non-IFRS net profit attributable to the parent was 28.14 billion yuan, a year-on-year decrease of 17.3% and a month-on-month increase of 10.2%.

Among them, social network revenue was 29.2 billion yuan, a year-on-year increase of 0.7%, game revenue was 51.6 billion yuan, a year-on-year decrease of 0.4%, and online advertising revenue was 18.6 billion yuan, a year-on-year decrease of 18.4%.

The total video playback volume of the video account increased by more than 200% year-on-year, the video playback volume based on artificial intelligence recommendation increased by more than 400% year-on-year, the number of daily active creators and the average daily video upload volume increased by more than 100% year-on-year, and the video number traffic is growing rapidly.

Positive signs of video account advertising monetization are emerging.

At the same time, the company took the initiative to shrink its own investment layout, and successively reduced its holdings of JD.com, Sea Limited, New Oriental and other listed companies.

In addition to capital gains, Tencent`s ecological traffic cooperation will bring greater commercial value.

Strategy：
Buy-in Price: $273, Target Price: $300, Cut Loss Price: $259

Source: Phillips

[winston]

vested

Tencent shifts focus to majority deals, overseas gaming assets for growth: sources

Resetting its M&A strategy to put more focus on buying majority stakes mainly in overseas gaming companies.

Looking to snap up global assets, in particular in Europe, related to the metaverse.

Tencent’s pursuit for bigger stakes in gaming firms comes as other tech giants such as Microsoft, Sony and Amazon are also snapping up gaming assets and related intellectual properties.

From 2015 to 2020, the owner of China’s number one messaging app WeChat made 150 investments at home totaling US$75 billion, compared to 102 deals worth US$33 billion in overseas markets.

In the last two years. Tencent has barely made investments in China this year versus 27 deals worth US$3 billion offshore,

Repeatedly emphasised that it is aiming to have half of its gaming revenue coming from outside China, from about 25 per cent now. In doing so, it in December launched a new publishing brand called Level Infinite in Singapore.

Source: Reuters

https://www.businesstimes.com.sg/garage ... th-sources

[winston]

vested

Tencent: Lack of new growth drivers for top-line.

Tencent’s mobile grossing dropped 3% yoy (domestic: flat; international: -23% yoy). The weakness can be seen across multiple game titles due to weaker domestic sentiment and relaxation of lockdown measures in the international market which reduced time spent on online games.

Despite absence of new games being approved by NPPA, top-line is supported by “League of Legends” with 69% growth mom due to the new version and Honour of Kings (HoK) saw revenue growth of 6% yoy in September, driven by the seasonal expansion pack launched that month.

We cut our game revenue growth to -6% yoy in 3Q22 for Tencent from a previous 5% yoy growth.

https://research.uobkayhian.com/content ... ac2d878f86

[winston]

vested

Tencent set for growth path in fourth quarter on revenue from video monetisation and new online games, Goldman says

by Zhang Shidong

Source: SCMP

https://www.scmp.com/business/china-bus ... gn=3196463

[winston]

vested

TENCENT(700)

Analysis：

Affected by domestic and foreign environments such as the epidemic and regulation, the company's performance in the second quarter of 2022 declined, with revenue down 3.14% year-on-year.

Non-IFRS net profit attributable to the parent was 28.14 billion yuan, a year-on-year decrease of 17.3% and a month-on-month increase of 10.2%.

Among them, social network revenue was 29.2 billion yuan, a year-on-year increase of 0.7%, game revenue was 51.6 billion yuan, a year-on-year decrease of 0.4%, and online advertising revenue was 18.6 billion yuan, a year-on-year decrease of 18.4%.

The total video playback volume of the video account increased by more than 200% year-on-year, the video playback volume based on artificial intelligence recommendation increased by more than 400% year-on-year, the number of daily active creators and the average daily video upload volume increased by more than 100% year-on-year, and the video number traffic is growing rapidly.

Positive signs of video account advertising monetization are emerging. At the same time, the company took the initiative to shrink its own investment layout, and successively reduced its holdings of JD.com, SeaLimited, New Oriental and other listed companies.

In addition to capital gains, Tencent's ecological traffic cooperation will bring greater commercial value.

As of October 14, 2022, Tencent has bought back 76 times in total since this year, with an accumulative amount of HK $24.5 billion, which also supports the share price.

Strategy：
Buy-in Price: $213, Target Price: $268, Cut Loss Price: $184.5

Source: Phillips

[winston]

vested

Investors ask what is plaguing Tencent as stock goes downhill since failing to reach US$1 trillion in market cap

Tencent’s third-quarter net income is expected to fall 36 per cent and revenue by 0.2 per cent, according to analysts’ estimates polled by Bloomberg

The WeChat operator’s shares have fallen 46 per cent this year, taking the decline to 68 per cent from an all-time high in January 2021

by Zhang Shidong

Source: SCMP

https://www.scmp.com/business/china-bus ... 5555be8230

[winston]

not vested

Tencent to distribute US$20b Meituan stake as dividend

by Zheping Huang

Tencent’s revenue fell 2% to 140.1 billion yuan (US$19.8 billion) in the September quarter, compared with the average projection for 141.4 billion yuan.

Net income came in at 39.9 billion yuan, versus the 25.2 billion yuan estimate.

Source: Bloomberg

https://www.theedgemarkets.com/article/ ... e-dividend

[winston]

not vested

Tencent dishes out Meituan sweeteners

by Caroline Zheng

Tencent (0700) posted a better-than-expected 1.1 percent rise in net profit to 39.94 billion yuan (HK$44.13 billion) in the third quarter and said it would give one Meituan (3690) share to shareholders for every 10 they hold as a special dividend

The tech giant's revenue, however, declined 1.6 percent to 140.1 billion yuan.

Domestic gaming revenue shrank 7 percent to 31.2 billion yuan, while international revenue rose 3 percent to 11.7 billion yuan.

Online advertisement sales also declined by more than 5 percent to 21.5 billion yuan.

Source: The Standard

https://www.thestandard.com.hk/section- ... sweeteners

[winston]

not vested

Tencent Holdings - 3Q22: Strong bottom line buoyed by efficiency initiatives.
(700 HK / BUY / HK$294.40 / Target: HK$357.00)

Tencent’s 3Q22 earnings were above expectations.

Revenue declined 2% yoy to Rmb140b, in line with our estimate.

Gross margin was flattish yoy at 44.2%, in line with consensus expectation.

NonGAAP operating profit was Rmb40.9b, flat yoy, and non-GAAP OPM came in at 29.2%, better than our estimate.

NonIFRS net profit increased 1.6% yoy to Rmb40.9b, beating our and consensus estimates by 11.7% and 7% respectively due to prudent cost control.

Maintain BUY. Target price: HK$357.00

Source: UOBKH

https://research.uobkayhian.com/content ... decb92d0b5