Besides, in the name of common prosperity, the government has indirectly extracted 100 billion yuan (about $15.5 billion) from Tencent. 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. 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. China’s proposed gaming rules would hit smaller developers more than large ones, while also reducing overall online advertising revenue, according to UBS.

1. In a letter that accompanied its regulatory filing, Huffman, Reddit’s CEO, said he hopes going public will benefit the site’s community, along with investors.
2. Earnings estimate revisions are the most important factor influencing stocks prices.
3. 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.
4. Tencent also has parallel businesses to many of the successful businesses of the western FAAMG stocks.
5. It takes the consensus estimate for the current fiscal year (F1) divided by the EPS for the last completed fiscal year (F0) (actual if reported, the consensus if not).

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. To date, games remain Tencent’s primary monetization model–as we estimate more than 40% of the group’s operating income comes from this segment. Tencent should continue to leverage its unrivaled access to user data and financial capital to create innovative, high-quality, and long-cycle games with a mobile-first approach. 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.

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 paxful review 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.

Tencent blamed that slowdown on China’s regulatory crackdown on online education, gaming, and internet service companies, all of which had advertised heavily on WeChat and Tencent’s streaming media services. 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.

The Projected Sales Growth (F1/F0) looks at the estimated growth rate for the current year. It takes the consensus sales estimate for the current fiscal year (F1) divided by the sales for the last completed fiscal year (F0) (actual if reported, the consensus if not). A higher number is better than a lower one as it shows how effective a company is at generating revenue from its assets.

This is useful for obvious reasons, but can also put the current day’s intraday gains into better context by knowing if the recently completed trading day was up or down. The Daily Price Change displays the day’s percentage price change using the most recently completed close. A ratio of 1 means a company’s assets are equal to its liabilities. Less than 1 means its liabilities exceed its short-term assets (cash, inventory, receivables, etc.).

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For example, a cash/price ratio, or cash yield, of .08 suggests an 8% return or 8 cents for every $1 of investment. As of writing, Tencent’s stock has a price-to-earnings ratio of 16. 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.

Tencent (TCEHY -0.11%) 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. 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). 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).

ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities. 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 bittrex review investor, having bought stakes early on in what have become some of the region’s most prominent companies. Tencent’s largest shareholder is Prosus (majority owned by Naspers), which owns 30.86% of all shares[2] and hence is the controlling shareholder.[286] However, Ma Huateng, co-founder of Tencent, still owns a significant stake (8.42%).

Tencent leads China selloff amid new gaming restrictions

Zacks Ranks stocks can, and often do, change throughout the month. Certain Zacks Rank stocks for which no month-end price was available, pricing information was not collected, or for certain other reasons have been excluded from these return calculations. Zacks may license luno exchange review the Zacks Mutual Fund rating provided herein to third parties, including but not limited to the issuer. In an unusual move, the company plans to allow top users, including moderators, the chance to purchase shares in its initial public offering, also known as an IPO.

Enterprise Value / Earnings Before Interest, Taxes, Depreciation and Amortization is a valuation metric used to measure a company’s value and is helpful in comparing one stock to another. The VGM score is based on the trading styles of Growth, VAlue, and Momentum. For example, a regional bank would be classified in the Finance Sector.

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. All told, Tencent is a highly diversified company that provides many FAAMG-like services to Chinese and global users. The 1 week price change reflects the collective buying and selling sentiment over the short-term. A strong weekly advance (especially when accompanied by increased volume) is a sought after metric for putting potential momentum stocks onto one’s radar. Others will look for a pullback on the week as a good entry point, assuming the longer-term price changes (4 week, 12 weeks, etc.) are strong.

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Which users are picked will be determined by their Reddit “karma,” a term the site uses to determine a user’s reputation on the platform. Popular online message board site Reddit is filing to sell stock in an initial public offering, the first social media IPO since 2019. 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.com (JD), Pinduoduo (PDD), and Ant Group… has increased steadily,” according to a statement by CAC. 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.

China’s potential new gaming rules will hit smaller developers more, analyst says

An industry with a larger percentage of Zacks Rank #1’s and #2’s will have a better average Zacks Rank than one with a larger percentage of Zacks Rank #4’s and #5’s. You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security.

Cash is vital to a company in order to finance operations, invest in the business, pay expenses, etc. Since cash can’t be manipulated like earnings can, it’s a preferred metric for analysts. A stock with a P/E ratio of 20, for example, is said to be trading at 20 times its annual earnings.