Tencent 0700 03 (Aug 18 - Sep 21)

[winston]

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The sell-off in Asia’s biggest stock is nearing US$100bil

HONG KONG: Tencent Holdings Ltd.’s sell-off may get a lot worse after the shares failed to hold above their key support level.

Asia’s biggest stock closed down 0.3% in Hong Kong on Thursday, despite an otherwise upbeat market in the city.

Tencent is now trading below the key level of HK$320 that supported its shares on three occasions this year.

The stock has lost about 20% since a peak in April, equivalent to some $93 billion in market value.

While Tencent has been stuck in a downtrend for months, selling was particularly aggressive earlier this week despite no apparent trigger.

Theories circulating round some trading floors included souring sentiment from investors in China, as well as concern that Tencent’s decision to air National Basketball Association games may backfire.

Adding to jitters this week was a local media report that China is considering revising a law to control young people’s online gaming activities -- a business that remains one of Tencent’s most profitable.

The Internet giant will report third quarter earnings on Nov. 13.

Source: Bloomberg

https://www.thestar.com.my/business/bus ... QE4f3I1.99

[winston]

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TENCENT (00700.HK) Blacklisted for Improper Telecom Operation by PRC

In 3Q19, 21 companies were imposed administrative penalties and blacklisted for improper telecom operation, due to behaviors such as unlicensed operation, over-range operation, failure to cooperate with supervision and violation of real-name system, as revealed by China's MIIT website.

Shenzhen Tencent Computer Systems Company Limited was among the list.

Source: AAStocks Financial News

[winston]

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<Research Report>CICC Sees TENCENT 3Q19 Non-GAAP NP RMB24.7B, Mobile Game Revenue +25%

TENCENT (00700.HK) will unveil its 3Q19 results next Wednesday (13th).

Stripping stake increase in Supercell, Tencent's easing revenue growth across major units may linger into 4Q19.

However, its 3Q19 margin could beat expectation due to stringent cost control and higher revenue contribution from a favorable game mix.

CICC estimated Tencent's 3Q19 non-GAAP net profit at RMB24.7 billion, about 1.1% ahead of consensus.

Equally, Tencent's mobile game revenue is modeled to grow 25% YoY or 10% QoQ.

Some of its recently launched mobile games faded quickly in terms of grossing ranking, likely having little revenue contribution in 3Q19.

Source: AAStocks Financial News

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TENCENT's PUBG Mobile Oct Revenue of US$154M Tops Chart

TENCENT (00700.HK)'s PUBG Mobile topped global mobile games chart of the researcher Sensor Tower with a revenue of US$154 million for October 2019, up seven times yearly.

65% of the revenue of PUBG Mobile came from Chinese version whereas 10% and 4% from the US and Japan.

TENCENT's Honor of Kings came as the second with a revenue of US$116 million, 92% of which stemmed from China.

The third and fourth spots were seized by Candy Crush Saga and Pokemon GO.

Source: AAStocks Financial News

[winston]

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<Research Report>HSBC Global Research: TENCENT (00700.HK) Regulatory Risk Manageable; Kept Buy

Online game regulations are stricter in China.

Apparently more compliant and proactive than peers, however, TENCENT (00700.HK) could better cope with the relevant regulatory risks, opined HSBC Global Research.

Tencent has rolled out measures limiting minors' gaming hours, and may need to extend the time limit in case of more regulatory tightening.

However, statistics showed that only 12% of Chinese mobile game players are minors, meaning further restrictions would have immaterial impact on Tencent.

Overall, Tencent was retained at Buy, with an unchanged target of $433.

Source: AAStocks Financial News

[winston]

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Tencent (700 HK)
3Q19 Results Preview: Cautious On Game Revenue Growth, Fintech To Be The Next Growth Engine


Tencent will announce its 3Q19 results on 13 November.

We remain cautious on game revenue in 3Q19.

We estimate top-line growth of 25% yoy, with 10%/22%/57% yoy growth from online games, advertising and payment/cloud revenues respectively.

We expect EPS growth of 17% yoy and net margin of 24% for 3Q19.

We cut out target price to HK$416.00 from HK$423.00 to factor in the slowing growth of game revenue.

Maintain BUY.

Source: UOBKH

https://research.uobkayhian.com/content ... e5e185649d

[winston]

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Tencent set for 25pc profit rise

by Kevin Xu

Tencent is expected to report weaker growth in gaming and advertising revenues. Reuters

Tencent's (0700) third-quarter results, to be released today, are expected to show a 25 percent rise in net profit from last year, according to China International Capital Corporation (3908), but with weaker growth in its gaming and advertising branches.

CICC expects Tencent's revenue in the third quarter to grow by 21 percent year-on-year, and advertising revenue to grow by 14 percent.

Tencent Music Entertainment Group, meanwhile, reported better-than-expected third-quarter revenue on Monday. It also recorded the slowest rise in its social entertainment services, which executives attributed to growing competition.

Tencent Music's US-listed shares rose as much as 2 percent before trading down about 1 percent in volatile extended trade.

Monthly average revenue per paying user from Tencent's social entertainment services unit rose 7.4 percent to 127.3 yuan (HK$142.18), the slowest growth since it went public in December.

"We recognize that it may be slightly below where we previously thought it would be," said Tony Yip, chief strategy officer. "That's primarily because of increasing competition that we are facing with short video platforms."

Tencent Music competes with Alibaba-backed NetEase Cloud Music in streaming services and short video sites such as Bytedance's Douyin in social entertainment.

Net income rose to 1.02 billion yuan from 964 million yuan a year earlier. Revenue rose about 31 percent to 6.51 billion yuan, above estimates of 6.45 billion yuan. Excluding items, it earned 0.74 yuan per American depositary share, above estimates of 0.66 yuan.

Source: The Standard

http://www.thestandard.com.hk/section-n ... 1113&sid=2

[winston]

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Tencent misses Q3 estimates; 13% decline in quarterly profit

Source: SCMP

https://www.scmp.com/tech/big-tech/arti ... rly-profit

[winston]

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Tencent earnings dip 13pc on lower games and ad revenues

China's biggest gaming and social media company Tencent (0700) reported a surprise 13 percent drop in quarterly profit yesterday, hurt by a weaker-than-expected core smartphone games business and falls in media advertising and computer games revenue.

Net profit fell to 20.38 billion yuan (HK$22.74 billion) from 23.33 billion a year earlier and missed the 23.45 billion expected by analysts, 15 estimates compiled by Refinitiv for the three months to September 30 showed.

It was Tencent's lowest quarterly profit this year and its first profit fall since the fourth quarter of 2018.

Revenue rose 21 percent to 97.2 billion yuan but was short of the 98.2 billion expected by 17 analysts on average.

Its core smartphone gaming business, including major titles such as Honour of Kings, Perfect World Mobile and Peacekeeper Elite, reported a 25 percent rise in revenue to 24.3 billion yuan.

Jefferies analysts said this was weaker than their forecast of 32 percent growth.

China's regulator stopped approving new games for monetization for about nine months last year, resulting in Tencent reporting its lowest annual profit growth in 13 years.

Approvals restarted in December, with Tencent receiving permission to monetize Perfect World Mobile in the first quarter of 2019.

Media advertising revenue fell 28 percent to 3.7 billion yuan due to lower intake on platforms including Tencent Video which the firm attributed in part to "unpredictability in scheduling major content releases."

Personal computer games revenue fell by 7 percent after a recent update of Dungeon Fighter Online attracted fewer paying users than a year earlier, it said.

Revenue in FinTech and Business Services, a category set up this year incorporating payment and cloud services, rose 36 percent to 26.8 billion yuan, helped by rapid growth in commercial payment services.

Cloud service revenue grew 80 percent to 4.7 billion yuan due to "increased consumption from existing customers and an expanded customer base in the education, financial, municipal services and retail sectors," the company said in a statement.

Source: The Standard

http://www.thestandard.com.hk/section-n ... 1114&sid=2

[winston]

not vested

Tencent Holdings: Global gaming ambitions

Tencent Holdings (Tencent; 700 HK) 3Q19 results were a miss.

Revenue rose 21% YoY to RMB 97.2b, which was 1.8% below consensus.

On a non-GAAP basis, PATMI grew 24% YoY to RMB 24.4b, which was 1.5% below consensus.

On games, we believe management is making a notable push into the global market, especially by building on the success of PUBG Mobile and Call of Duty mobile, and leveraging the group’s strong relationships with global partners.

On the online advertising front, management noted that the worst was probably over in terms of the 3Q weakness seen in its media ads business.

In 3Q, it was encouraging to see that the GPM for Tencent’s FinTech and Business Services segment grew 2.6%pts to 27.7%, benefiting from structural tailwinds.

While this print could cause near-term downward pressure on the share price, we believe that valuations remain attractive at 25.0x forward Bloomberg P/E, which is 1.6 S.D below the 5-year mean.

We roll over our valuations to FY20, and following adjustments to our forecast, we reduce our FV from HK$403 to HK$391. Maintain BUY.

Source: OCBC