Full Answer
What happened to Tencent Music Entertainment Group?
Shares of Chinese music streaming service Tencent Music Entertainment Group ( NYSE:TME) got caught in a landslide this morning, tumbling as much as 21% in early trading, and still down about 19% as of 12:45 p.m. EDT.
Is Tencent stock really worth just $29 a share?
Nevertheless, the bank believes that the stock's "rich valuation" already factors in this growth. Valuing Tencent at just $29 a share, it sees much less value in the stock than does HSBC. I kind of agree with China Renaissance on this one.
Can Tencent Music’s stock rebound?
Tencent Music’s status as a Chinese music streaming service has not helped its shares to rebound, despite efforts to right the ship. Following the March 24 plunge, TME announced on March 28 that it will repurchase up to $1 billion of its shares — a move that would show confidence and help stabilize its price.
Is Prosus selling its stake in Tencent?
Prosus ( OTC:PROSY) said it will sell up to 191.89 million Tencent shares, or roughly 2% of the Chinese tech titan's total share count. The sale will take Prosus's massive stake in Tencent down from 30.9% to 28.9%.
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Why did Tencent stock fall?
Tencent's stock suffered a sharp drop after the company reported its slowest-ever growth due to a bruising crackdown by China on the country's tech sector. Shares in the Chinese social media and gaming giant tumbled around 6% in Hong Kong on Thursday after its US-listed shares closed 5.4% lower on Wall Street.
Is Tcehy stock a good buy?
Tencent's quant rating and analyst recommendations According to Seeking Alpha's quant rating, TCEHY is currently a 'hold' with a score of 2.87. This isn't a good sign but looking at the factor grades contributing to the scoring, TCEHY stock has improved from three months ago.
Why is Tencent a good stock?
In the past, there were three main reasons to own Tencent: its booming gaming business, the rapid expansion of WeChat's advertising ecosystem, and its long-term growth opportunities in the fintech and cloud markets.
Is Tencent a Buy Sell or Hold?
Tencent has received a consensus rating of Hold. The company's average rating score is 2.44, and is based on 3 buy ratings, 4 hold ratings, and 1 sell rating.
How high can Tencent stock go?
The 53 analysts offering 12-month price forecasts for Tencent Holdings Ltd have a median target of 57.35, with a high estimate of 76.48 and a low estimate of 37.72. The median estimate represents a +21.44% increase from the last price of 47.22.
Who owns Tencent?
NaspersTencentTencent Seafront Towers in ShenzhenTotal assetsCN¥1.612 trillion (US$249.98 billion) (2021)Total equityCN¥876.693 billion (US$135.92 billion) (2021)OwnerNaspers (30.86%; since 2019 through Prosus) Ma Huateng (8.42%) Tony Zhang (3.5%)Number of employees112,771 (2021)19 more rows
Is Tencent undervalued?
Morningstar's analyst says the market is overlooking the company's long-term revenue opportunities.
Will Chinese stocks be delisted?
How soon could Chinese companies be delisted? Nothing is going to happen this year or even in 2023, which explains why markets initially took the possibility in their stride. Under the HFCAA, a company would be delisted only after three consecutive years of non-compliance with audit inspections.
Is Alibaba going to be delisted?
According to the HFCAA, there will be "an initial trading prohibition on a registrant as soon as practicable after it is conclusively identified as a Commission-Identified Issuer for three consecutive years." Alibaba's shares fell by -8% from $100.93 as of March 9, 2022 to $92.92 as of March 10, 2022.
Should I buy Tencent stock Zacks?
Zacks' proprietary data indicates that Tencent Holding Ltd. is currently rated as a Zacks Rank 5 and we are expecting a below average return from the TCEHY shares relative to the market in the next few months.
What is the target price for Baba stock?
Stock Price TargetsHigh$1,537.81Median$1,007.50Low$707.57Average$1,012.43Current Price$117.62
What is VAS Tencent?
Value-added Services (VAS) In 2019, Tencent derived 53% of group revenues from its VAS businesses. In the last six years, this segment attained a CAGR of 28.2% in revenues where it increased from RMB45. 0 billion in 2013 to RMB200. 0 billion in 2019. Tencent's VAS comprise two sub-segments – Gaming and Social Network.
What happened
Tencent Holdings ( TCEHY -0.92% ) fell 7.5% Wednesday after its largest shareholder announced plans to sell as much as $15 billion worth of its stock.
So what
Prosus ( PROSY -5.60% ) said it will sell up to 191.89 million Tencent shares, or roughly 2% of the Chinese tech titan's total share count. The sale will take Prosus's massive stake in Tencent down from 30.9% to 28.9%.
Now what
Prosus's parent company, Naspers ( NPSNY -2.58% ) , made one of the most lucrative investments in corporate history. In 2001, it purchased a roughly 33% stake in Tencent for $32 million.
Why Tencent is a long-term buy
With Beijing seeking to strengthen its control over the Chinese economy and cracking down on businesses that supposedly violate China’s antitrust laws, Tencent is facing large political risks. Tencent is just one of many companies that were targeted by China’s antitrust regulator, the State Administration of Market Regulation, in 2021.
Political risks overshadow strong commercial performance
Although the market is not willing right now to recognize the commercial value of Chinese businesses, Tencent’s diversified business model and revenue growth are attractive.
Tencent is offering discounted value
Tencent is expected to double the dollar value of its revenues from FY 2021 until FY 2026. During this period, Tencent is set to grow revenues at a CAGR rate of 16% until they reach $186.2B in FY 2026.
Risks with Tencent
The risks with Tencent have political, not commercial, character. The crackdown on large companies in China has lowered the trust score for Chinese firms and many non-Chinese investors are not comfortable with buying Chinese stocks. This might change in the future, however, as China pulls back and lets companies go about their businesses again...
Final thoughts
Shares of Tencent have not dropped as much as shares of other large Chinese firms in 2021, Alibaba or Baidu come to mind, but Tencent's growth is still heavily discounted. Tencent is set to grow revenues at double-digit rates in the foreseeable future and the risk profile is skewed to the upside!
How much is Tencent Music's profit in 2020?
In a coincidentally timed 2020 earnings release, also on March 23, Tencent Music announced a net profit — yes, profit in a business with little of it — of $641.4 million on revenues of $4.5 billion in 2020, up 14.3% from 2019.
How much did TME stock fall on March 23?
Out of nowhere, TME shares plummeted 29% — from $32.25 on March 23 to $22.84 the following day. As of Tuesday (April 20), when TME shares closed at $16.99, it had fallen a steep 47.3% from March 23.
How much did Vipshop lose?
Vipshop lost 31.6% of its value the week of the selloff and has dropped another 12.9% since then. ViacomCBS closed Tuesday at $37.92, with a market capitalization $36.7 billion lighter since the saga began. For their part, Archegos’ lenders will collectively take an estimated $10 billion hit, according to JP Morgan.
When did TME repurchase its shares?
Following the March 24 plunge, TME announced on March 28 that it will repurchase up to $1 billion of its shares — a move that would show confidence and help stabilize its price. (Vipshop and GSX Techedu also announced buyback plans that day.)
Does Ackman understand crypto?
Ackman says he ‘kicks himself for not understanding’ crypto like bitcoin, but says it has ‘no intrinsic value’. Tencent Music Entertainment. Chinese music streaming company Tencent Music Entertainment (TME) was minding its own business in March — showing off strong 2020 earnings and announcing a partnership with Warner Music Group — ...
China's tech giant is making headlines for all the wrong reasons
Leo is a tech and consumer goods specialist who has covered the crossroads of Wall Street and Silicon Valley since 2012. His wheelhouse includes cloud, IoT, analytics, telecom, and gaming related businesses. Follow him on Twitter for more updates!
The next antitrust target after Alibaba
After China's State Administration for Market Regulation (SAMR) fined Alibaba ( NYSE:BABA) $2.75 billion for anticompetitive behavior in April, many investors assumed Tencent would be the next target.
Regulatory pressure in the U.S
Last September, the Committee on Foreign Investment in the United States (CFIUS) started probing Tencent's investments in American gaming companies -- including all of Riot Games, a 40% stake in Epic Games, and 5% of Activision Blizzard -- over national security concerns.
Regulatory pressure on WeChat Pay
Tencent's WeChat Pay holds a near-duopoly in China's online payments market with Ant Group's Alipay. However, the Chinese government wants to regulate both platforms more tightly as financial institutions -- which could cripple their ability to disrupt traditional state-run banks.
Banning its merger of Huya and DouYu
Last October, Tencent announced it would merge Huya ( NYSE:HUYA) and DouYu ( NASDAQ:DOYU), China's two largest video game streaming platforms, to create a new platform with nearly 300 million monthly active mobile users.
No more exclusive music for Tencent Music
On July 24, the SAMR forced Tencent Music ( NYSE:TME), which controls over 80% of China's streaming music market, to give up all of its exclusive music licensing rights. Tencent spun off Tencent Music in an IPO in late 2018, but it remains the company's biggest stakeholder.
The temporary suspension of WeChat's registrations
In late July, Tencent abruptly suspended new user registrations for WeChat, the most popular mobile messaging and Mini Programs platform in China, "to align with relevant laws and regulations."
Business is booming -- but the stock price already reflects that
I like things that go "boom." Sonic or otherwise, that means I tend to gravitate towards defense and aerospace stocks. But to tell the truth, over the course of a dozen years writing for The Motley Fool, I have covered -- and continue to cover -- everything from retailers to consumer goods stocks, and from tech to banks to insurers as well.
What happened
Shares of Chinese music streaming service Tencent Music Entertainment Group ( NYSE:TME) got caught in a landslide this morning, tumbling as much as 21% in early trading, and still down about 19% as of 12:45 p.m. EDT.
So what
After all, Tencent Music is now China's top streaming music company, as my colleague Leo Sun pointed out last week. It reported decent numbers in its most recent financial report, meeting analyst expectations for both sales ($1.28 billion) and earnings ($0.12 per share).
Now what
I kind of agree with China Renaissance on this one. With $636 million in trailing earnings, Tencent Music now trades for a steep 68-times-earnings valuation.
Tensions between the U.S. and China are rising
Joe honed his investing skills as an analyst for Stock Advisor. He battle-tested his investment philosophy and strategies as portfolio manager of Tier 1, a market-crushing Motley Fool real-money portfolio that delivered 24.58% annualized returns.
What happened
Shares of Tencent ( OTC:TCEHY), Alibaba ( NYSE:BABA), and JD.com ( NASDAQ:JD) fell 7.4%, 5.1%, and 4.3%, respectively, on Friday after the U.S. government took several actions against Chinese companies.
So what
President Trump placed bans on popular Chinese-owned social media platforms TikTok and Tencent-owned WeChat that go into effect in roughly six weeks. The move threatens to sever ties for people who reside in the U.S. and use the apps to communicate with friends, family, and business colleagues in China.
Now what
A significant portion of Alibaba's business is derived from U.S. e-commerce companies, which purchase goods from Chinese manufacturers and resell them in the U.S. and internationally. JD.com has also taken steps to expand its partnerships with U.S. businesses in recent years, which could now come under increased scrutiny from government officials.
