Is Tencent A Good Stock To Buy, Sell, Or Hold? OTCMKTS:TCEHY

Is Tencent A Good Stock To Buy, Sell, Or Hold? OTCMKTS:TCEHY

In the last quarter they bought back 48 million shares for RMB 14 billion and they will not stop. In short, investing in Tencent is in my opinion equivalent to investing in China’s economic growth since WeChat Pay is used for any ordinary transaction. Moreover, WeChat is the best way for Chinese companies to sponsor their products and connect with new customers. Probably, only when Meta (META) implements these functions on WhatsApp will we really understand how important WeChat is to the Chinese. Since COGS has remained unchanged from last year, gross profit has experienced an increase in all business segments.

Tencent’s social-networks business generated stable growth through in-app purchases on its livestreaming platforms as well as premium subscription sales on Tencent Video and Tencent Music Entertainment Group. However, all of those platforms could still struggle to expand in the saturated streaming-media market. On the bright side, Tencent’s online advertising and fintech and business services segments generated accelerating revenue growth. WeChat, Tencent’s top messaging platform and Mini Program ecosystem, still grew its monthly active users 5% year over year to 1.23 billion. But if the Chinese government starts aggressively throttling or policing Tencent’s data-gathering capabilities, it could struggle to expand WeChat and its other social media platforms. Tencent’s online gaming revenue rose 29% year over year to 39.1 billion yuan ($6.0 billion), compared to its 45% growth in the third quarter.

The online gaming company says it will focus on its portfolio of live games such as League of Legends, Valorant, Teamfight Tactics, and Wild Rift. As Tencent’s revenue growth stalls out, it’s divesting its non-core assets and reining in its operating expenses. That’s why it divested most of its stake in JD.com to its investors in the form of a special dividend earlier this year, and why it plans to do the same to its stake in the food delivery giant Meituan. Tencent faces short-term headwinds from the Chinese government crackdown and the generally weak external economy. However, the tech behemoth should resume its upward trajectory in the longer term by growing its internal businesses and investment portfolio.

1. The 20 Day Average Volume is the average daily trading volume over the last 20 trading days.
2. Within the Finance Sector, it would fall into the M Industry of Banks & Thrifts.
3. Overall, the global mobile game market where Tencent has leadership was valued at $184.40 billion in 2022 by Precedence Research.
4. By the way, domestic games revenues have seen a +5% increase despite the fact that a series of regulations against the use of video games were already passed years ago.
5. In this section I will explain in detail the main segments of its operating business and you may be surprised how powerful this company is.

But, typically, an aggressive growth trader will be interested in the higher growth rates. The PEG ratio is the P/E ratio divided by its long-term growth rate consensus. This ratio essentially compares the P/E to its growth rate, thus, for many, telling a more complete story than just the P/E ratio alone. The Momentum Scorecard focuses on price and earnings momentum and indicates when the timing is right to enter a stock. The tested combination of price performance, and earnings momentum (both actual and estimate revisions), creates a powerful timeliness indicator to help you identify stocks on the move so you know when to get in and when to get out.

Investors like this metric as it shows how a company finances its operations, i.e., what percentage is financed thru shareholder equity or debt. A ratio under 40% is generally considered to be good.But note; this ratio can vary widely from industry to industry. So be sure to compare it to its group when comparing stocks in different industries. A ratio of 1 means a company’s assets are equal to its liabilities. Less than 1 means its liabilities exceed its short-term assets (cash, inventory, receivables, etc.). Historical EPS Growth Rate looks at the average annual (trailing 12 months) EPS growth rate over the last 3-5 years of actual earnings.

Virtually every successful game (especially mobile) has Tencent’s hand in it. In terms of revenue, Tencent is the largest game company in the world and features multiple internationally renowned titles. The secret of its success lies in having made a series of brilliant acquisitions and struck favorable deals with major game providers in the West. HONG KONG, Dec 22 (Reuters) – Chinese regulators announced on Friday a wide range of rules aimed at curbing spending and rewards that encourage video games, dealing a blow to the world’s biggest games…

BBC News Services

Shares of tech conglomerate Tencent (0700.HK) were down more than 12% Friday morning amid an $80 billion market selloff in Chinese gaming stocks, sparked by new, unexpected restrictions from Beijing. Chinese online gaming stocks rose Wednesday, recovering some losses from the previous session after the country’s top gaming regulator said it will “carefully study” the concerns of all stakeholders o… The Chinese government has ousted a top official in charge of regulating the country’s gaming industry, according to reports, in a likely effort to stem the damage from a stock market rout over propos… 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…

Unlike Alibaba, Tencent’s price per share has rebounded quite a bit from the lows reached in late 2022, so it seems that the market is less pessimistic about this stock. There would also be dozens of other segments to discuss, but they are of less importance than those mentioned. The point is that Tencent is probably one of the most dominant companies in the world right now, leading in many even different markets. No company has its influence in China, not even Alibaba, and it seems to be slowly expanding to the West as well. Continuous acquisitions are branching out its business more and more, and it is already present in our lives more than we realize. Its most successful title is Honor of Kings, and it has had peaks of 100 million daily active users.

Style Scorecard

Its cloud and long-form video businesses are expected to improve on profitability as the company reduces expenses on items like marketing. Given that its peers would similarly abandon a growth-at-all-costs mentality, Tencent should be able to maintain its market share despite lower spending. Tencent is a terrific company but political risk is scaring investors.

Enterprise Value / Earnings Before Interest, Taxes, Depreciation and Amortization is a valuation metric used to measure a company’s value and is helpful in comparing one stock to another. football stocks The VGM score is based on the trading styles of Growth, VAlue, and Momentum. The Growth Scorecard evaluates sales and earnings growth along with other important growth measures.

For one, part of trading is being able to get in and out of a stock easily. If the volume is too light, in absolute terms or for a relatively large position, it could be difficult to execute a trade. This is also useful to know when comparing a stock’s daily volume (which can be found on a ticker’s https://bigbostrade.com/ hover-quote) to that of its average volume. A rising stock on above average volume is typically a bullish sign whereas a declining stock on above average volume is typically bearish. The 12 Week Price Change displays the percentage price change over the most recently completed 12 weeks (60 days).

Ma said that Tencent will work on integrating its Hunyuan software into different business scenarios to boost efficiency instead of rapidly launching AI products. In my previous article titled Is Alibaba Stock A Buy Or Sell After $25 Billion Buyback Announcement? I pointed out that non-Chinese companies are increasingly targeted by foreign governments, even as the governments where the companies are based are themselves looking at ways to rein in the tech players.

NetEase loses a quarter of its value and Tencent stock skids on new China gaming rule proposal

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Company Report

Tencent generated 50% of its revenue from its value-added services (VAS) segment, which is split between its domestic video games, international video games, and nonadvertising social and streaming media services. The Shenzhen-based social media and entertainment conglomerate also controls another 16% stake in Nio’s ADSs through three of its units. Tencent was the second-largest Nio shareholder in terms of voting rights after Li Bin, founder of the automaker, who held 13.8% in shares but 47% voting rights, according to a March filing by the company. As of 8 July, they bought another amount of shares increasing their stake in Nio to 16.3%. It dominates China’s gaming and social media sectors, and analysts expect its revenue and earnings to rise 21% and 27%, respectively, this year. Those are high growth rates for a stock that trades at just 25 times forward earnings.

This signaled Beijing’s intention to continue protecting the interest of foreign investors. I’m not saying they are altruistic, but it shows they want to attract overseas funding and are savvy (or shrewd, if you prefer) enough to keep investors happy. With TCEHY’s outperformance over BABA stock, it is no wonder that some of my friends questioned if Tencent stock is overvalued. The discussion may seem odd considering the big cut in the market cap of Tencent from its peak already. The point here is not to discourage those who have invested in Apple (this is just one of many examples I could have given), but to bring out an interesting food for thought about how the market is reacting hypocritically about China risk.