Tencent shares decline after US adds company to Chinese military blacklist
https://www.theedgesingapore.com/news/u ... -blacklist
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Tencent 0700 04 (Oct 21 - Dec 25)
Re: Tencent 0700 04 (Oct 21 - Dec 25)
by winston » Wed Jan 08, 2025 11:01 am
vested
Tencent Holdings (700 HK) - Tencent’s inclusion on the US list of Chinese Military Companies
Since the introduction of the list in 2021, it is updated on an annual basis. DOD is not allowed to procure goods, services or technology developed by companies on the CMC list.
What’s the company response? Tencent clarified that it is not a military company or supplier. Unlike sanctions or export controls, this listing has no impact on business fundamentals as the CMC list only forbids the DOD to procure products and services from Tencent. Tencent will work with the DOD to address any misunderstanding.
Can companies be removed from the Section 1260H list? Companies that have been included in the CMC list and were eventually removed, including Hesai Technology (removed in October 2024), IDG Capital Partners (removed in December 2024) and Xiaomi (removed in May 2021) after providing valid explanations. Based on Xiaomi’s previous inclusion in the list, there was no impact on the actual business; for instance, there was no ban on acquiring GPU, and no restrictions on US fund investment.
What is the difference between the CMC list and the Non-SDN Chinese Miliary-Industrial Complex Companies (NS-CMIC) list? The NS-CMIC is defined to include Chinese companies operating in the defense or surveillance sectors. The NS-CMIC list restricts US fund investment and trading activities with companies on the list. Given that Tencent is not a state-owned enterprise (SOE) and is not operating in the defense and surveillance sectors, we believe there is a low probability of the company to be included in the NS-CMIC list.
What to do with the stock? We believe Tencent’s overall business fundamentals and growth outlook remain intact. That said, the news could signal rising geopolitical tensions and is likely to be a share price overhang until further clarity on the development.
To recap, Tencent’s key businesses are value-added services (which include domestic and international gaming and social network) and online advertising, which together accounted for about two-thirds of revenue. The remaining one-third of revenue comes from fintech, business services and others.
Tencent remains as the preferred play in the internet and platform companies. Its business model enables it to benefit from cyclical and macro recovery, and also offer defensiveness with its leading position in games.
The company is on track to achieve the >HKD100b share buyback target. 3Q24 share buyback amounted to HKD36b, making year-to-date cumulative share buyback is more than HKD90b.
More updates on the 2025 share buyback program will be provided at the 4Q24 (or FY2024) results release and management is committed to enhancing shareholders return.
The stock is trading at 13.6x forward price-to-earnings (P/E), which is around levels when the policy pivot was announced in September 2024. We maintain our fair value estimate to HKD560.00 based on sum of the parts (SOTP) methodology. BUY.
Source: OCBC
Tencent Holdings (700 HK) - Tencent’s inclusion on the US list of Chinese Military Companies
Since the introduction of the list in 2021, it is updated on an annual basis. DOD is not allowed to procure goods, services or technology developed by companies on the CMC list.
What’s the company response? Tencent clarified that it is not a military company or supplier. Unlike sanctions or export controls, this listing has no impact on business fundamentals as the CMC list only forbids the DOD to procure products and services from Tencent. Tencent will work with the DOD to address any misunderstanding.
Can companies be removed from the Section 1260H list? Companies that have been included in the CMC list and were eventually removed, including Hesai Technology (removed in October 2024), IDG Capital Partners (removed in December 2024) and Xiaomi (removed in May 2021) after providing valid explanations. Based on Xiaomi’s previous inclusion in the list, there was no impact on the actual business; for instance, there was no ban on acquiring GPU, and no restrictions on US fund investment.
What is the difference between the CMC list and the Non-SDN Chinese Miliary-Industrial Complex Companies (NS-CMIC) list? The NS-CMIC is defined to include Chinese companies operating in the defense or surveillance sectors. The NS-CMIC list restricts US fund investment and trading activities with companies on the list. Given that Tencent is not a state-owned enterprise (SOE) and is not operating in the defense and surveillance sectors, we believe there is a low probability of the company to be included in the NS-CMIC list.
What to do with the stock? We believe Tencent’s overall business fundamentals and growth outlook remain intact. That said, the news could signal rising geopolitical tensions and is likely to be a share price overhang until further clarity on the development.
To recap, Tencent’s key businesses are value-added services (which include domestic and international gaming and social network) and online advertising, which together accounted for about two-thirds of revenue. The remaining one-third of revenue comes from fintech, business services and others.
Tencent remains as the preferred play in the internet and platform companies. Its business model enables it to benefit from cyclical and macro recovery, and also offer defensiveness with its leading position in games.
The company is on track to achieve the >HKD100b share buyback target. 3Q24 share buyback amounted to HKD36b, making year-to-date cumulative share buyback is more than HKD90b.
More updates on the 2025 share buyback program will be provided at the 4Q24 (or FY2024) results release and management is committed to enhancing shareholders return.
The stock is trading at 13.6x forward price-to-earnings (P/E), which is around levels when the policy pivot was announced in September 2024. We maintain our fair value estimate to HKD560.00 based on sum of the parts (SOTP) methodology. BUY.
Source: OCBC
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
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Re: Tencent 0700 04 (Oct 21 - Dec 25)
by winston » Wed Jan 08, 2025 1:37 pm
not vested
<Research>CMBI: TENCENT's Daily Operations, Outlook Unaffected by Inclusion in US Military List; ST Pressure Will Ease if No Further Escalation
CMBI opined in its report that TENCENT (00700.HK) being added by the US Department of Defense to the list of Chinese Military Companies will not affect the company's daily operations and outlook.
In addition, XIAOMI-W (01810.HK) has previously been successfully removed from the list, which can serve as a reference.
If the situation does not escalate further, the recent pressure on the stock price should dissipate.
Related News: BOCI Elevates XIAOMI-W (01810.HK) TP to $50 on Robust Outlook, Positive Investor Sentiment
CMBI kept an Overweight rating on TENCENT and set its target price at $500.
Source: AAStocks Financial News
http://www.aastocks.com/en/stocks/news/ ... -news/AAFN
<Research>CMBI: TENCENT's Daily Operations, Outlook Unaffected by Inclusion in US Military List; ST Pressure Will Ease if No Further Escalation
CMBI opined in its report that TENCENT (00700.HK) being added by the US Department of Defense to the list of Chinese Military Companies will not affect the company's daily operations and outlook.
In addition, XIAOMI-W (01810.HK) has previously been successfully removed from the list, which can serve as a reference.
If the situation does not escalate further, the recent pressure on the stock price should dissipate.
Related News: BOCI Elevates XIAOMI-W (01810.HK) TP to $50 on Robust Outlook, Positive Investor Sentiment
CMBI kept an Overweight rating on TENCENT and set its target price at $500.
Source: AAStocks Financial News
http://www.aastocks.com/en/stocks/news/ ... -news/AAFN
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
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winston - Billionaire Boss
- Posts: 110201
- Joined: Wed May 07, 2008 9:28 am
Re: Tencent 0700 04 (Oct 21 - Dec 25)
by behappyalways » Fri Jan 10, 2025 5:30 pm
Tencent Revs Up Stock Buyback Program To Biggest In Decades After Pentagon Blacklist
https://www.zerohedge.com/markets/tence ... -blacklist
https://www.zerohedge.com/markets/tence ... -blacklist
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Re: Tencent 0700 04 (Oct 21 - Dec 25)
by winston » Fri Jan 17, 2025 3:37 pm
vested
<Research>CICC Expects TENCENT 4Q24 Non-IFRS NP to Grow 29% YoY; Bigger Buyback Shows Confidence
CICC said in a research report that, after reviewing TENCENT (00700.HK) 's overall performance, it believed that the outlook of its game business is still solid, and the increase in share buybacks highlights its confidence in the future.
The company, while continuing the achievement of high quality earnings growth, put emphasis on shareholders' returns.
The broker maintained an Outperform rating, with a target price of $468, equivalent to the 16x 2025E and 14x 2026E PE.
Based on operating leverage, CICC expected Tencent's non-IFRS operating profit to grow by 20% YoY in the 4Q24, while non-IFRS net profit is expected to grow by 29% YoY, way beyond revenue growth.
Tencent had introduced the concept of “evergreen games” in early 2024, and that the long-term value of its flagship games can be further explored, which will help strengthen the fundamentals of the game business, opined CICC.
Source: AAStocks Financial News
http://www.aastocks.com/en/stocks/news/ ... -news/AAFN
<Research>CICC Expects TENCENT 4Q24 Non-IFRS NP to Grow 29% YoY; Bigger Buyback Shows Confidence
CICC said in a research report that, after reviewing TENCENT (00700.HK) 's overall performance, it believed that the outlook of its game business is still solid, and the increase in share buybacks highlights its confidence in the future.
The company, while continuing the achievement of high quality earnings growth, put emphasis on shareholders' returns.
The broker maintained an Outperform rating, with a target price of $468, equivalent to the 16x 2025E and 14x 2026E PE.
Based on operating leverage, CICC expected Tencent's non-IFRS operating profit to grow by 20% YoY in the 4Q24, while non-IFRS net profit is expected to grow by 29% YoY, way beyond revenue growth.
Tencent had introduced the concept of “evergreen games” in early 2024, and that the long-term value of its flagship games can be further explored, which will help strengthen the fundamentals of the game business, opined CICC.
Source: AAStocks Financial News
http://www.aastocks.com/en/stocks/news/ ... -news/AAFN
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
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winston - Billionaire Boss
- Posts: 110201
- Joined: Wed May 07, 2008 9:28 am
Re: Tencent 0700 04 (Oct 21 - Dec 25)
by winston » Mon Jan 20, 2025 5:03 pm
vested
<Research>HSBC Research Drops TENCENT's TP to $540; Fundamentals Strong w/ Improved Risk-Reward
TENCENT (00700.HK) 's gaming business remained resilient, while its advertising and e-commerce continued to perform positively, shoring up short-term growth, according to a report from HSBC Global Research.
In terms of domestic games, "Delta Force" contributed revenue throughout the quarter, "Honor of Kings" logged robust skin sales, and other games delivered resilient performance, driving the quarterly domestic gaming revenue growth to 20% YoY, compared to 14% in 3Q24.
In terms of international games, "Path of Exile 2" achieved immense commercial success and is expected to contribute substantial revenue upon official release. Benefiting from deferred revenue from "Supercell", international gaming revenue is anticipated to leap 12% YoY.
The broker largely maintained its results forecast for TENCENT. It trimmed its target price for the company from $570 to $540 based on the latest RMB-HKD assumptions and gave it a Buy rating.
Source: AAStocks Financial News
http://www.aastocks.com/en/stocks/news/ ... -news/AAFN
<Research>HSBC Research Drops TENCENT's TP to $540; Fundamentals Strong w/ Improved Risk-Reward
TENCENT (00700.HK) 's gaming business remained resilient, while its advertising and e-commerce continued to perform positively, shoring up short-term growth, according to a report from HSBC Global Research.
In terms of domestic games, "Delta Force" contributed revenue throughout the quarter, "Honor of Kings" logged robust skin sales, and other games delivered resilient performance, driving the quarterly domestic gaming revenue growth to 20% YoY, compared to 14% in 3Q24.
In terms of international games, "Path of Exile 2" achieved immense commercial success and is expected to contribute substantial revenue upon official release. Benefiting from deferred revenue from "Supercell", international gaming revenue is anticipated to leap 12% YoY.
The broker largely maintained its results forecast for TENCENT. It trimmed its target price for the company from $570 to $540 based on the latest RMB-HKD assumptions and gave it a Buy rating.
Source: AAStocks Financial News
http://www.aastocks.com/en/stocks/news/ ... -news/AAFN
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
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winston - Billionaire Boss
- Posts: 110201
- Joined: Wed May 07, 2008 9:28 am
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