Usually, shares of a company of Tencent’s caliber won’t come cheap. But this stock — still down by more than half from its 2021 peak — is currently trading thinking fast and slow by daniel kahneman plot summary at a reasonable valuation. In other words, Tencent has twin engines of internal business and external investments to keep its growth machine humming.
Tencent Holdings Limited, an investment holding company, offers value-added services (VAS), online advertising, fintech, and business services in the People’s Republic of China and internationally. It operates through VAS, Online Advertising, FinTech and Business Services, and Others segments. In addition, the company operates innovation business, which includes artificial intelligences; and discover and develops enterprise and next-generation technologies for food production, energy, and water management application.
- In some ways, Tencent actually looks ahead of its western counterparts, in particular by utilizing its social media platform for payments and many other services, and by finding more ways to monetize its intellectual property than just a subscription service.
- As of writing, Tencent’s stock has a price-to-earnings ratio of 16.
- Usually, shares of a company of Tencent’s caliber won’t come cheap.
- 3 Wall Street equities research analysts have issued «buy,» «hold,» and «sell» ratings for Tencent in the last twelve months.
- Fortunately, it is the only game in town, and it could keep that position for a while.
Upgrade to MarketBeat All Access to add more stocks to your watchlist. As of February 29th, there was short interest totaling 3,119,400 shares, a drop of 26.7% from the February 14th total of 4,257,300 shares. Based on an average trading volume of 5,650,200 shares, the short-interest ratio is currently 0.6 days. New Rank-Based ScoringMarketRank™ is calculated by averaging available category scores (with extra weight given to analysis and valuation), then ranking the company’s weighted average against that of other companies.
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On the other hand, USA stocks have done very well since then while emerging markets have nearly had a lost decade of their own. Tencent halted the development of a highly anticipated mobile game based on Square Enix’s «Nier» franchise in December, according to three people with knowledge of the matter, marking a setback in the… Tencent’s largest shareholder is Prosus (majority owned by Naspers), which owns 25.6% of all shares[286][2] and hence is the controlling shareholder.[287] However, Ma Huateng, co-founder of Tencent, still owns a significant stake (8.42%).
The consensus among Wall Street equities research analysts is that investors should «moderate buy» TCEHY shares. Get stock recommendations, portfolio guidance, and more from The Motley Fool’s premium services. Patient investors with investing horizons of more than five years should consider buying some shares.
Domestic games, which include its blockbuster game Honor of Kings, accounted for 73% of that total. The remaining 27% came from overseas https://www.forex-world.net/strategies/a-simple-yet-profitable-strategy/ hits like League of Legends, Valorant, and PUBG Mobile. As of writing, Tencent’s stock has a price-to-earnings ratio of 16.
Chinese government partnerships
Besides, that existing metric doesn’t consider the value of the vast investment portfolio ($117 billion ) the company owns. Adjusting for these investments would result in an even lower price-to-earnings ratio. If Tencent operated in the USA, it would pretty much be a no brainer buy, especially at its current price.
All told, Tencent is a highly diversified company that provides many FAAMG-like services to Chinese and global users. In some ways, Tencent actually looks ahead of its western counterparts, in particular by utilizing its social media platform for payments and many other services, and by finding more ways to monetize its intellectual property than just a subscription service. Those divestments could also boost Tencent’s profits even as its revenue growth stalls out.
Its advertising business continues to shrink
And they use it not only for communication but also to access services such as online payments, ride-sharing, public transportation, entertainment, online gaming, and more. In a way, it’s almost impossible for an average Chinese citizen to live in China without using WeChat and its ecosystem of services. Tencent generated 32% of its third-quarter revenue from its fintech and business services segment, which houses Tencent Cloud (the third-largest cloud infrastructure platform in China), WeChat/Weixin Pay (one of the country’s two largest payment platforms), and its other enterprise apps. Tencent’s clever use of its social media platform and intellectual property allows it to share its moat with some of its investments, which dramatically boosts the chance that they will succeed. It’s also very likely that Tencent uses data about which WeChat and cloud apps are gaining popularity to choose which companies to invest in, a huge advantage over most other retail – or institutional – investors.
Other Chinese government policies also hurt Tencent’s financials in 2022. For example, its regulatory crackdowns on the online education and tech industries have severely impacted Tencent’s advertising and cloud income. Like most Chinese stocks, Tencent Holdings (TCEHY 0.19%) has been on a rough ride in recent years. After its share price reached an all-time high of nearly $100 in 2021, it lost almost three-quarters of its value, and it’s still down by more than half. Beijing has quietly pulled the proposed curbs on the video game industry from the official website, weeks after the draft guidelines wiped tens of billions of dollars off the market value of local tit…
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Tencent has also partnered with Nintendo to distribute Nintendo’s console and games within China. International gaming revenue now represents 25% of Tencent’s online games revenue and it’s growing faster than domestic games revenue. Pony Ma, chief executive and https://www.topforexnews.org/software-development/5-ux-designer-career-paths-stepping-up-your-design/ co-founder of Tencent Holdings , has said that the company’s video games business faces great challenges from competitors but is catching up in artificial intelligence (AI… Tencent generated 31% of its third-quarter revenue from its video game business.
To keep making money from its ecosystem, all it has to do is ensure that it remains the preferred communication platform in China. Fortunately, it is the only game in town, and it could keep that position for a while. Tencent’s 2022 results might have disappointed its longtime shareholders, but make no mistake.
As a result, Tencent’s total VAS (value-added service) revenue — which includes its gaming divisions, social media platforms, and streaming media subscriptions — declined by 3% in the third quarter but still accounted for more than half of its top line. This core business might gradually stabilize as Tencent expands its international gaming business, but it will likely remain under intense pressure as long as the Chinese government continues to scrutinize the gaming industry. With 1.3 billion monthly active users (MAU), its user base includes almost everyone in China.
While its shareholders suffered during that period, contrarian investors can consider its aftermath an opportunity to buy shares of one of the best companies in China for cheap. Tencent Holdings’ Riot Games plans to lay off 530 employees, or about 11% of staff globally, the online gaming company said on Monday in a blog that included a letter to staff from CEO Dylan Jadeja. China’s central bank has approved Tencent Holdings’ online payment platform Tenpay boosting its registered capital to 15.3 billion yuan ($2.13 billion), according to a central bank statement on Friday…