On 16 November, Tencent said it would divest its over 90% of its stake in Meituan by distributing over 958 million Meituan shares to Tencent shareholders. Prosus also reiterated its “continued confidence in Tencent’s long-term prospects”. Tencent stock went on to experience its worst periods of losses in succeeding months as China embarked on a regulatory drive in 2021. While global peers underperformed in the difficult economic conditions of the Covid-19 era, Tencent stock surged to an all-time high of HKD775.6. In January 2018, Tencent rose to a then-record high of HKD476.6 following a run of 13 consecutive months of gains. Tencent Holdings’ stock has experienced wild swings in recent years, marked by record highs and multi-year lows.
- That progress is encouraging, but Tencent’s overseas business could also face regulatory headwinds.
- The 1 Week Price Change displays the percentage price change over the last 5 trading days using the most recently completed close to the close from 5 days before.
- China’s proposed gaming rules would hit smaller developers more than large ones, while also reducing overall online advertising revenue, according to UBS.
Read our company analysis and Tencent stock forecast for 2023 and beyond. Tencent Holdings (0700), China’s biggest company by market capitalisation, staged a rebound in November as the stock rose from its lowest price in over five years. That’s all speculation for now, but Ant Group (which owns WeChat Pay’s closest competitor, Alipay) was also probed by regulators and forced to restructure its business as a financial holding company last year. That progress is encouraging, but Tencent’s overseas business could also face regulatory headwinds. Tencent’s net profit rose 60% to 94.96 billion yuan ($14.9 billion), but that was mainly driven by a massive sale of JD.com (JD -1.46%) shares last December. Excluding that gain and other one-time benefits, Tencent’s adjusted net profit declined 25% to 24.88 billion yuan ($3.9 billion).
That means these items are added back into the net income to produce this earnings number. Since there is a fair amount of discretion in what’s included and not included in the ‘ITDA’ portion of this calculation, it is considered a non-GAAP metric. The EV/EBITDA ratio is a valuation multiple and is often used in addition, or as an alternative, to the P/E ratio.
That slowdown was mainly caused by the sluggish growth of its domestic gaming and social network businesses, which largely offset the stronger growth of its international gaming business. A Chinese government regulator released new draft regulations targeting spending and engagement on online games on Friday, causing listed shares of major domestic gaming giants to crater amid fears of… Tencent (TCEHY, 0700.HK) — the parent company of social media app TikTok — shares are trading higher after announcing layoffs at video game developer Riot Games, joining the ranks of companies rolling… Over the past decade, Tencent has capitalized on the industry shift toward mobile gaming.
Recent price changes and earnings estimate revisions indicate this would be a good stock for momentum investors with a Momentum Score of A. 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.
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 hover-quote) to that of its average volume.
A change in margin can reflect either a change in business conditions, or a company’s cost controls, or both. If a company’s expenses are growing faster than their sales, this will reduce their margins. But note, different industries have different margin rates that are considered good. And margin tokenexus rates can vary significantly across these different groups. So, when comparing one stock to another in a different industry, it’s best make relative comparisons to that stock’s respective industry values. Video games form over 30% of Tencent’s revenue, making this a critical area, Reuters reports.
The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities. He said Tencent should modify its products so that it would be viewed as “a partner of banks”.
Products and services
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. Finally, an artificial intelligence-based 0700 stock forecast from Wallet Investor expected Tencent stock to close the first quarter of 2023 at an average price of HKD313.5. The second quarter saw revenue fall 3% year-over-year (YOY) due to a slump in online advertising earnings.
Industry Products
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. Tencent Holdings Limited was formerly known as Tencent (BVI) Limited and changed its name to Tencent Holding Limited in February 2004. The company was founded in 1998 and is headquartered in Shenzhen, the People’s Republic of China. Zacks’ proprietary data indicates that Tencent Holding Ltd. is currently rated as a Zacks Rank 3 and we are expecting an inline return from the TCEHY shares relative to the market in the next few months. In addition, Tencent Holding Ltd. has a VGM Score of B (this is a weighted average of the individual Style Scores which allow you to focus on the stocks that best fit your personal trading style).
Nvidia’s Key Market China Wants To Beat US Embargo, Boosts Chipmaking Machinery Imports by 14%
Beijing maintains stringent scrutiny over Big Tech’s involvement in financial services after years of regulatory tightening. Ant, the fintech giant affiliated with South China Morning Post owner Alibaba Group Holding, has undergone a major business reorganisation and ownership changes to satisfy government requirements. On balance, I’m cautiously optimistic about the company’s prospects over the next few years. And with the stock trading at a reasonable price-to-earnings (PE) ratio of 16, I don’t think it’s too irrational for long-term investors to buy stock in the company. On top of that, Tencent can rely on its capital allocation skills to divert unused cash into external investments.
Tencent’s Riot Games to cut around 530 jobs, or 11% of its workforce
The 20 Day Average Volume is the average daily trading volume over the last 20 trading days. The Price to Sales ratio or P/S is calculated as price divided by sales. After the P/E ratio, it’s one of the most common valuation metrics. 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. This includes measuring aspects of the Income Statement, Statement of Cash Flows, the Balance Sheet, and more.
So when the tech company reported that its revenue and operating profit fell by 1% and 13%, respectively, in 2022, investors would have found it difficult to swallow. The investment research firm added that Tencent owns Honor of Kings, the world’s top grossing mobile game, and is the world’s largest video game vendor. Tencent’s online advertising revenue, which accounted for 15% of its top line, tumbled 13% year over year to 21.5 billion yuan ($3.37 billion). By comparison, Baidu’s (BIDU -0.31%) online marketing revenue rose 1% year over year to 19.1 billion yuan ($3 billion) last quarter. 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.
Domestic regulatory developments and Sino-US relationship concerns have emerged as key risks for Tencent shareholders. According to Morningstar, Tencent is “arguably the most influential internet firm in China as one can hardly go by a day without using its products”. As of 7 December, Tencent had a market capitalisation of HKD3.03trn ($3.9bn), making it the most valuable company listed in Hong https://traderoom.info/ Kong. However, the tech giant remained over 60% below its all-time high, despite surging about 40% in November. The Motley Fool owns and recommends Baidu, JD.com, and Tencent Holdings. Videogame maker Riot Games on Monday said it would lay off around 530 employees globally, or around 11% of its total staff, as it tries to narrow its focus after making what executives said were sever…
So be sure to compare a stock to its industry’s growth rate when sizing up stocks from different groups. Its flawless performance, however, fell short lately as it delivered its first-ever annual decline in revenue. Net profit for the year performed worse, down by 17% year over year.
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