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Its domestic gaming revenue fell 7% year over year, representing its third consecutive quarter of shrinking revenue, as it grappled with tighter playtime restrictions for minors in China over the past year. Those restrictions also coincided with a temporary suspension on new video game approvals in China, which started last July and ended this April. 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.

  1. 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.
  2. If Tencent operated in the USA, it would pretty much be a no brainer buy, especially at its current price.
  3. Riot Games is laying off about 530 employees, which represents 11% of its workforce, the Tencent-owned company announced on Monday.

The company’s revenue is arguably more diversified but as fast growing as the tech giants in the USA, and its investment portfolio is one of the largest in the world. Like Apple and Google, Tencent also has a suite of first party apps within WeChat that allow users to do things like pay friends/merchants, pay utilities and phone bills, call a taxi, order food delivery, buy movie tickets, do online shopping, talk to a doctor, read news, meet strangers, play games etc. 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. 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. That stabilization should allay some near-term fears regarding the segment, which was initially expanded through a restructuring four years ago to reduce the company’s dependence on video games.

This segment’s revenue rose 4% year over year during the quarter and accelerated from its 1% growth in the second quarter. Tencent mainly attributed that recovery to an acceleration in both «online and offline commercial payment activities,» and noted that it was scaling back some of Tencent Cloud’s unprofitable https://www.day-trading.info/trading-stocks-australia-what-is-the-asx-200-and/ services to strengthen its margins. Tencent (TCEHY 0.19%) posted its third-quarter earnings report on Nov. 16. The Chinese tech giant’s revenue fell 2% year over year to 140.1 billion yuan ($19.7 billion), which represented its second consecutive quarter of declining revenue since its IPO in 2004.

Tencent Holdings Limited (TCEHY)

On an adjusted basis, which excludes its investments and other one-time items, its net profit grew 2% to 32.3 billion yuan ($4.5 billion). Tencent had been a hallmark of consistent and sustainable growth, with an unbroken track record of growth since it went public in 2004. 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.

Domestic games, which include its blockbuster game Honor of Kings, accounted for 73% of that total. The remaining 27% came from overseas hits like League of Legends, Valorant, and PUBG Mobile. As of writing, Tencent’s stock has a price-to-earnings ratio of 16.

It is quite natural for a company of that size to find it challenging to sustain high growth rates. Tencent also has parallel businesses to many of the successful businesses of the western FAAMG stocks. Riot Games, the developer of the popular «League of Legends» multiplayer battle game, is joining other tech companies that have been trimming their payrolls with a layoff of 11% of its staff. Chinese stocks surged on Tuesday amid reports of mooted stimulus plans and a sign that tough draft tech rules could be eased. Xiaolin Chen, head of international at KraneShares, discusses the Chinese tech company’s earnings and says it has «plenty of room» to diversify.

Accessibility

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 is barely growing, yet its stock still trades at 20 times next year’s earnings. Therefore, I can’t consider it a value play — or an attractive investment at all — when so many other high-growth stocks are still on sale. With its dominant market position, Tencent has plenty of opportunities to profit from its captive users.

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.

2010: Founding and growth

As the S&P 500 hits new highs, Chinese stocks are closing in on lows reached more than a decade ago. Riot Games is laying off about 530 employees, which represents 11% of its workforce, the Tencent-owned company announced on Monday. The League of Legends maker is also sunsetting its five-year-old pub… China’s Tencent Holdings posted What is nas 100 a 7% rise in fourth-quarter revenue on Wednesday, trailing analysts’ expectations, as China’s economic slowdown takes a toll. Chinese internet giant Tencent on Wednesday posted its lowest annual profit since 2019, despite slight improvements recently in China’s economy and a more lenient attitude taken by regulators towards …

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. Tencent Holdings Limited, an investment https://www.forexbox.info/best-crypto-exchanges-of-august-2021/ holding company, offers value-added services (VAS), online advertising, fintech, and business services in the People’s Republic of China and internationally. The company was founded in 1998 and is headquartered in Shenzhen, the People’s Republic of 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…

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. Shareholders of record on Friday, May 19th will be paid a dividend of $0.2691 per share on Tuesday, June 20th. This is an increase from the stock’s previous dividend of $0.18. 3 Wall Street equities research analysts have issued «buy,» «hold,» and «sell» ratings for Tencent in the last twelve months. There are currently 1 hold rating and 2 buy ratings for the stock.

Alibaba and China Stocks Rebound on Stimulus Report and Tech Rule Moves

For this reason, I want diversified exposure to compelling growth opportunities in both markets. 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). Their ownership of Supercell and Riot Games also gives them exposure to Clash Royale (#1 strategy), Clash of Clans (#5 strategy), and League of Legends (#28 strategy).