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Tencent Holdings Limited TCEHY Stock Price, Quote & News

what is tencent stock

Readers may have noticed in my earlier chart that a descending triangle pattern fitted the prevailing share price movement of TCEHY stock. Contrary to the bullish ascending triangle pattern, the descending triangle pattern is a bearish one. The last time something similar developed was May-July 2021 and the share price of TCEHY took a big tumble down thereafter. China’s gaming regulator has removed from its website rules it proposed last month aimed at curbing spending and rewards that encourage playing video games, checks by Reuters on Tuesday showed, in a m… Pony Ma, chief executive and 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… Besides, in the name of common prosperity, the government has indirectly extracted 100 billion yuan (about $15.5 billion) from Tencent.

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. Patient investors with investing horizons of more than five years should consider buying some shares. In other words, Tencent has twin engines of internal business and external investments to keep its growth machine humming. On a slightly positive note, Tencent has somewhat recovered from its 2022 woes.

TCEHY Stock News Headlines

Consequently, five years down the road, we could come to realize that TCEHY stock was actually undervalued rather than overvalued. However, this would be assuming that Tencent is just sitting like a lame duck and unable to mitigate the situation. To assuage shareholders’ concerns, Tencent elaborated at length on its strategies for maintaining its strong market position and capturing growth opportunities. Tencent also has parallel businesses to many of the successful businesses of the western FAAMG stocks. Investors of record on Friday, May 19th will be given a dividend of $0.2691 per share on Tuesday, June 20th. Since then, TCEHY shares have decreased by 4.4% and is now trading at $36.14.

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… Recently beaten-down China online gaming stocks rebounded on Wednesday in Hong Kong on news of a more conciliatory tone on the sector by the country’s top gaming regulator. Chinese gaming stocks rose on Wednesday to outperform a weak broader market, after Reuters reported China removed a gaming regulatory official. China’s Tencent has taken over two ByteDance video games units after ByteDance retreated from the gaming business last year, according to a person familiar with the matter. The online games segment consists of some China-specific titles but also many well known international titles like PUBG Mobile (#9 strategy game on the USA App Store).

what is tencent stock

All told, Tencent is a highly diversified company that provides many FAAMG-like services to Chinese and global users. 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. Even if this does not materialize, the compression of Tencent’s valuation multiples has made the stock attractive.

Unfortunately, the share price took a turn for the worse and plunged to levels not seen since late 2019, effectively giving up more than two years of gains. Over the past decade, Tencent has capitalized on the industry shift toward mobile gaming. The firm owns some of the world’s most popular titles, like Honor of Kings and PUBG Mobile.

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.

Investment Portfolio

And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data. Chinese stocks surged on Tuesday amid reports of mooted stimulus plans and a sign that tough draft tech rules could be eased. As the S&P 500 hits new highs, Chinese stocks are closing in on lows reached more than a decade ago. According to one analyst, the rating for TCEHY stock is “Buy” and the 12-month stock price forecast is $46.0.

SHANGHAI, Dec 27 (Reuters) – China’s Tencent Holdings (0700.HK) saw its shares stage a partial rebound on Wednesday, the first day of trade after authorities vowed to make improvements to proposed rul… 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… Riot said it’s cutting headcount for Legends of Runeterra and giving up on an initiative to publish games from indie developers. Shawn Yang of Arete Research says that Baidu is “still doing better” than Alibaba or Tencent when it comes to AI development.

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. For the price targets, analysts are split, with the most bearish slapping HK$279.98 on the low end for the Hong Kong shares (lack of coverage for TCEHY) and the most bullish expecting the stock to hit an incredible HK$820.97 within the 12 months. The current share price is a mere HK$374.40, meaning a downside of less than HK$100 even if the most bearish target is reached but an upside of more than HK$446 if everything is rosy and the high-end price target is achieved. Although Tencent Holdings has its primary listing in Hong Kong – its TCEHY and TCTZF shares are traded ‘over-the-counter’ [OTC] – it was unable to escape the discount accorded to Chinese ADRs for the risk of delisting from U.S. stock exchanges. Besides being painted with the same stroke by market players for being Chinese, Tencent is also negatively impacted by the poor stock performances of its various investments – many of them are Chinese ADRs – as a holding company.

  1. To keep making money from its ecosystem, all it has to do is ensure that it remains the preferred communication platform in China.
  2. China’s proposed gaming rules would hit smaller developers more than large ones, while also reducing overall online advertising revenue, according to UBS.
  3. 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.
  4. That supported TCEHY stock to resume its uptrend and it hit a record high in early 2021.
  5. Professor Jin is the Deputy Dean, School of International Relations, and Deputy Director, Center for American Studies, of the Renmin University of China.

There were speculations that the layoff announcements were made to extract concessions from Beijing or simply to signal to the regulators that they should back down on their scrutiny. Naysayers may pick on the fact that Tencent’s offerings weren’t on the initial batch of approved games. However, it should be highlighted that in late 2018 when China resumed the games approval following a hiatus then, Tencent was also missing from the initial batches. Yet, the company went on to receive dozens of game approvals in the following two years. That supported TCEHY stock to resume its uptrend and it hit a record high in early 2021. Indeed, Tencent Holdings’ PE ratio has fallen to a decade low of 13.0 times.

China’s Tencent takes over two ByteDance video game teams – source

This is a far cry from the high of 61.6 times it enjoyed in 2014 and also substantially lower than the multi-year average of 37.4 times. Tencent Holdings’ PS ratio has also crashed to a decade low of 5.2 times, against the peak of 16.9 times it was valued at in late 2017. The current PS ratio is less than half the multi-year average of 10.9 times. An obvious negative driver for the current down leg is the economic damage resulting from the lockdowns in numerous areas in China, including the financial powerhouse province of Shanghai and the manufacturing hub of Guangzhou.

Trending Analysis

Moreover, buying the stock at its current valuation poses no significant risk of permanent capital loss. As for the stock discount on Chinese stocks amid allegations that the Chinese government was planning to repudiate Variable Interest Entities [VIEs] and delisting fears due to the HFCAA, perhaps shareholders were again too pessimistic. Rather than experiencing job losses, the total employment at “A-list tech companies such as Alibaba, Tencent, ByteDance (BDNCE), (JD), Pinduoduo (PDD), and Ant Group… has increased steadily,” according to a statement by CAC. The dire straits the gaming industry was in since last year due to the nine-month suspension of games approval could supposedly be a thing of the past with the Chinese authorities approving last week the first set of video game licenses since July 2021.

The deterioration in Momentum is expected given the share price movement. For example, emerging markets stocks did quite well in the “lost decade” for USA stocks between 2000 and 2010. On the other hand, USA stocks have done very well since then while emerging markets have nearly had a lost decade of their own. But this stock — still down by more than half from its 2021 peak — is currently trading at a reasonable valuation. 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. Given the execution history of Tencent management, the company could deliver on its strategies and prove the investing community to be too bearish presently.

The gaming unit of Tencent Holdings is well poised to benefit from the population stuck at home. However, with reduced business activities on closures, Tencent is seeing curtailed transactions on its payment app and will likely report lower advertising spending – a major contributor to its revenue – for the past weeks. With the Chinese internet companies operating under a harsher regulatory environment and fear mongers having a field day on what the U.S. government officials can do in their eagerness to ‘contain China’, related stocks continued to decline. The pressures from both Beijing and Washington even led to various quarters calling Chinese stocks “uninvestable”. A series of regulatory tightening moves thereafter reinforced the thinking and the decimation of the for-profit after-school tutoring industry virtually overnight in late July 2021 led investors’ fear of Beijing’s resolve reaching the zenith. Outside of China, delisting concerns due to the Holding Foreign Companies Accountable Act [HFCAA] and trumped-up allegations that the Chinese government was planning to repudiate Variable Interest Entities [VIEs] exacerbated the bearish sentiment.