Tencent 0700 03 (Aug 18 - Sep 21)

[winston]

not vested

Prosus to sell 2pc stake in Tencent worth $117b

by Victor Zhong

Dutch-based technology investment company Prosus plans to sell a 2 percent stake of Tencent, worth about HK$117 billion at current prices, to fund growth ventures.

Prosus, majority owned by Naspers of South Africa, said the sale would lower its stake in Tencent to 28.9 percent from 30.9 percent.

Source: The Standard

https://www.thestandard.com.hk/section- ... orth-$117b

[winston]

not vested

Valuation

We reiterate our BUY rating with an unchanged TP of HK$1,033.

We derive our TP of HK$1,033 based on unchanged SOTP methodology with the following assumptions:
(1) 35x FY22F net profit from its core business (HK$817)
(2) market value for other investments (HK$185) and
(3) net cash of FY22F (HK$31).

Source: DBS

https://www.dbs.com.sg/treasures/aics/s ... 700_HK.xml

[winston]

not vested

Tencent (TCEHY)

Tencent is a massive company that owns shares of many mobile and online gaming companies, fintech businesses, advertising businesses and others. The company has faced recent selling pressure, yet its market capitalization currently sits at around $750 billion.

There are rumors that its gaming division may be preparing a hostile takeover of various U.S. gaming companies. Gamers and investors alike worry that the company is approaching monopolistic power within games. Yet, there are other larger concerns about the company regarding its fintech division.

The CCP is cracking down on fintech companies following their meteoric rise. Beijing is clearly trying to reign in information regarding its consumer base. When Ant Group’s IPO was quashed, that was big news.

But regulations on Chinese companies that grew at breakneck pace were incipient regardless. There is serious concern in Beijing that fintech companies have introduced massive risk across China’s financial ecosystem. The fintech space was largely unregulated as these companies simply didn’t have to play by the same rules that banks do.

China has real incentive to understand the scale and scope of what is really going on with fintech and the greater Chinese financial system. But, unearthing the truth around Chinese fintech is no easy task. The downward pressure for major fintech players like Tencent will persist for some time.

Source: Investor Place

[winston]

not vested

Tencent girds for battle as revenue grows 25pc

Posting a 25 percent gain in quarterly revenue.

Tencent said yesterday it plans to invest a larger portion of its incremental profits this year in areas including cloud services, games and shortform video content.

Largely escaped Beijing's antitrust crackdown for now - despite its ubiquitous WeChat app offering unrivaled insights into all aspects of Chinese life and a commanding lead in gaming, music and social media markets.

Net income came in at 47.8 billion yuan in the March quarter, buoyed by 19.5 billion yuan of gains from the value of investments and disposals. Excluding those gains, adjusted net income came in at 33.1 billion yuan, slightly behind estimates.

Online gaming revenue rose 17 percent during the quarter, helped by mainstay titles like Honour of Kings, PUBG Mobile and Peacekeeper Elite as well as newer games including Moonlight Blade Mobile.

Source: The Standard

https://www.thestandard.com.hk/section- ... grows-25pc

[winston]

not vested

Tencent Holdings (700 HK)

1Q21: Online Games Growth Normalised, Committed To Investment To Stay
Competitive

Tencent reported solid results with 1Q21 revenue up by 25% yoy to Rmb135.3b, in line
with our and consensus estimates.

Gross profit was Rmb62.6b, up 18.6% yoy, with gross margin recorded at 46.3%, but down by 2.6ppt yoy on higher content cost and a shift towards lower-margin products (ie mobile ads).

Non-GAAP net profit margin was 24.5%, down by 0.6ppt yoy and 1.5ppt below street estimates. Maintain BUY with a lower target price of HK$789.00.

Source: UOBKH

https://research.uobkayhian.com/content ... 5ecdc2e447

[winston]

not vested

Brokers' Post-Result Ratings, TPs, Views on TENCENT (00700.HK) (Table)

Brokers│Ratings│TPs (HK$)
Goldman Sachs│Buy│920
Daiwa│Buy│870->850
Citigroup│Buy│808
Morgan Stanley│Overweight│800
UBS│Buy│780
HSBC Global Research│Buy│796->775
Jefferies│Buy│755
Credit Suisse│Outperform││800->750
JPMorgan│Overweight│800->750
Nomura│Buy│780->731
Macquarie│Outperform│778->719
---------------------------------------------

Brokers│Views

Related NewsJPM Cuts TENCENT TP to $750: Investment Hike May Drag 2021 Adj. Profit Growth to 12%

Goldman Sachs│QoQ results in-line
Daiwa│Investment catalyzes future growth
Citigroup│QoQ results beat
Morgan Stanley│Fintech, corporate service rev. growth offsets post-pandemic normalization
UBS│QoQ results in-line; investment hike may spur doubts
HSBC Global Research│QoQ results in-line; enters investment cycle
Jefferies│QoQ results in-line; strong execution brings opportunities
Credit Suisse│Investment hike drives long-term growth
JPMorgan│Investment hike subdues near-term margin
Nomura│Ramps up investment for future growth
Macquarie│Investment plan rational

Source: AAStocks Financial News

[winston]

not vested

1Q21 results generally in line; stepping up investment could increase near-term pressure

Tencent’s 1Q21 results were generally in line with market expectations. Online game
revenue was better than feared. Yoy revenue growth in online ads, and Fintech &
Cloud accelerated in 1Q21 qoq.

However, stepping up investment in three strategic areas – SaaS products, online
gaming and short video – will put pressure on near-term profitability.

We lowered our net profit forecasts slightly for 2021F, 2022F and 2023F after the 1Q21 results announcement.

The cut in net profit forecasts is expected to put pressure on Tencent shares in the
near term.

We still hold a constructive view on the Company, as we believe that the
investment will translate into future growth.

Reiterate ADD with a new DCF-based target price of HK$677.1 (down from HK$692.9).

Source: CIMB

https://rfs.cgs-cimb.com/api/download?f ... 1877BDBD2D

[winston]

not vested

Tencent president cashes in $190m of shares

Martin Lau Chi-ping, president of Tencent (0700), has reduced his stake in the company to cash in around HK$190 million.

Lau sold 250,000 shares of Tencent at an average price of HK$629.7726 on Wednesday and sold 50,000 shares at HK$624.465 on Thursday, according to data from Hong Kong Exchanges and Clearing (0388).

He sold a total of 300,000 shares. After the transaction, he holds 56.06 million shares.
His shareholding fell from 0.59 percent to 0.58 percent. His stake was worth around HK$34.3 billion, based on today's closing price.

Lau last time reduced stake in Tencent in January 18. He sold 100,000 shares at HK$659.751 to cash out HK$66 million.

Source: The Standard

https://www.thestandard.com.hk/breaking ... -of-shares

[winston]

not vested

TENCENT(700)

Analysis：

Tencent (700) is principally engaged in the provision of VAS, FinTech and Business Services and Online Advertising services.

The company`s revenue in 1Q21 was RMB 135.3 billion, up by 25% YoY.

The YoY growth was mainly driven by its high growth in business services and advertising sectors.

The company`s adjusted NP in 1Q21 was RMB 33.1 billion, up by 22% YoY.

Although the company is expected to increase its investment in the near future, which will negatively impact its short term net profit, but it is expected to benefit its long term development.

We believe the company`s fundamental is solid with an attractive valuation currently.

Strategy：
Buy-in Price: $590, Target Price: $650, Cut Loss Price: $560

Source: Phillips

[winston]

vested

WeChat mini programs for banking pose ‘significant’ risks of personal data leakage, says report

Personal banking mini programs on WeChat found to have major data leak risks, report says

Sensitive information is found unprotected and unencrypted in dozens of personal banking mini programs

by Xinmei Shen

Source: SCMP

https://www.scmp.com/tech/tech-trends/a ... sonal-data