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Is Tencent Holdings Stock a Buy Now?
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. With its dominant market position, Tencent has plenty of opportunities to profit from its captive users. To keep making money from its ecosystem, all it has to do is ensure that it remains the preferred communication platform in China.
Tencent removes hit game ‘Dungeon & Fighter’ from Huawei, Oppo, and Vivo app stores
Chinese e-commerce giant Alibaba’s domestic platforms, Taobao and Tmall, will begin accepting payments from Tencent’s WeChat pay, according to a source familiar with the matter. That progress is encouraging, but Tencent’s overseas business could also face regulatory weltrade highest rebate 95% headwinds. India’s regulators have already banned Tencent’s games along with dozens of other Chinese apps, while the Committee on Foreign Investment in the United States has been closely scrutinizing Tencent’s stakes in American gaming companies. Outside of companies subsidiary of its game division, Tencent as a whole has many major and minor investments in domestic and, since the 2010s, foreign game companies.
TCEHY Stock News Headlines
While the Chinese government’s new direction will not directly weaken Tencent’s competitive advantage (more on this later), it certainly puts its future profitability at risk. Unfortunately, political risks are unavoidable when investing in Chinese companies. Many hope that the move could lure more consumers from rival platforms that already accept a variety of payment methods.
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. Alibaba’s shopping platforms Taobao and Tmall will accept Tencent’s WeChat Pay likely within this month, a source familiar with the matter told CNBC. South Africa’s Naspers said on Monday its full-year earnings more than doubled, buoyed by improved performance of its e-commerce businesses and contribution from China’s Tencent , which accounts for t… Shares in Tencent, like much of the rest of Chinese tech, have been slammed since Beijing began a crackdown on technology companies in late 2020. The Beijing Central Axis is now ready for digital visitors from around the world SHENZHEN, China , July 27, 2024 /PRNewswire/ – Tencent (0700.HK) today launched the largest virtual urban historical l… Payments firm Airwallex is nearing an annual revenue run rate of $500 million after seeing significant growth in its North American and European businesses, CEO Jack Zhang told CNBC.
- By comparison, Baidu’s (BIDU -2.17%) online marketing revenue rose 1% year over year to 19.1 billion yuan ($3 billion) last quarter.
- One was that the company had become gigantic, generating 555 billion yuan ($79.6 billion) in revenue in 2022.
- Tencent’s stock looks reasonably valued at 22 times forward earnings, but it probably won’t rally until its domestic gaming business stabilizes, its advertising business recovers, and its fintech business avoids Ant Group’s fate.
- Other Chinese government policies also hurt Tencent’s financials in 2022.
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The international gaming business’ growth was supported by new content for Valorant and Clash Royale, an adjustment of its deferred revenue at mobile-game developer Supercell, and its consolidation of Warframe developer Digital Extremes. Tencent’s domestic gaming business was once its main growth engine. But it’s sputtered out as the government has imposed tighter playtime restrictions for minors and temporarily suspended the approval of new games last year. Founded in 1993, The Motley Fool is a financial services company dedicated to making the world smarter, happier, and richer. The Motley Fool reaches millions of people every month through our premium investing solutions, free guidance and market analysis on Fool.com, top-rated podcasts, and non-profit The Motley Fool Foundation.
Tencent’s 2022 results might have disappointed its longtime shareholders, but make no mistake. One was that the company had become gigantic, generating 555 billion yuan ($79.6 billion) in revenue in 2022. It is quite natural for a company of that size to find it challenging to sustain high growth rates. 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. Like most Chinese stocks, Tencent Holdings (TCEHY -1.30%) has been on a rough ride in recent years.
2010: Founding and growth
When it comes to gaming, the use of ChatGPT-like generative artificial intelligence is still in an exploratory phase, according to Liang Chen, general manager of Tencent Cloud’s internet industry depa… China’s tech giants are reporting earnings this week, which Tencent, Alibaba and JD.com providing a snapshot of China’s economy and consumer sentiment. The Motley Fool owns and recommends Baidu, JD.com, and Tencent Holdings. Regulatory headwinds are throttling the Chinese tech giant’s growth. Tencent’s largest shareholder is Prosus (majority owned by Naspers), which owns 25.6% of all shares[2] and hence is the controlling shareholder.[283] However, Ma Huateng, co-founder of Tencent, still owns a significant stake (8.42%). Patient investors with investing horizons of more than five years should consider buying some shares.
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 at a reasonable valuation. In other words, Tencent has twin engines of internal business and external investments to keep its growth machine humming. If that’s not enough, Tencent has proven to be an excellent tech investor, having bought stakes early on in what have become some of the region’s most prominent companies.
Excluding that gain and other one-time benefits, Tencent’s adjusted net profit declined 25% to 24.88 billion yuan ($3.9 billion). Investing in the Chinese tech giant now might be a smart move. Tencent’s profitability has grown due to aggressive monetization and cost-cutting.
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. Tencent Holdings Limited was formerly known as Tencent (BVI) Limited and changed its name to Tencent Holding Limited in February 2004.
Fortunately, it is the only game in town, and it could keep that position for a while. On a slightly positive note, Tencent has somewhat recovered from its 2022 woes. It delivered respectable first-quarter 2023 results, with revenue and operating profit up by 11% and 9%, so the worst is probably over for the company. According to a report from CNBC-TV18, Tencent is expected to sell 2.1% stake or 9.7 million shares in the company via a large block deal tomorrow.
The Shenzhen-based social media and entertainment conglomerate also controls another 16% stake in Nio’s ADSs through three of its units. The only bright spot in Tencent’s report was its fintech and business services segment, which houses WeChat Pay, Tencent Cloud, and its other cloud-based services. Its revenue rose 25% year over year to 48 billion yuan ($7.5 billion), or 33% of its top line, as the use of its digital payment and cloud-based business services soared across multiple industries. 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 1 chf to jpy exchange rate platforms could still struggle to expand in the saturated streaming-media market.