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Tencent Holding Ltd. ADR (TCEHY)

- OTCPK - Current
  • Mon, Aug. 24, 9:22 AM
    • The Shanghai and Shenzhen exchanges nosedived again overnight as fears of an economic slowdown triggered panic selling, and U.S. futures are off sharply premarket. As one would expect, many U.S.-traded Chinese names are seeing big losses.
    • Baidu (NASDAQ:BIDU) -9.8% premarket. SINA -9.7%. Weibo (NASDAQ:WB) -10.5%. Ctrip (NASDAQ:CTRP) -9.4%. Qunar (NASDAQ:QUNR) -15%. SouFun (NYSE:SFUN) -15.4%. NQ Mobile -10.1%. Qihoo (NYSE:QIHU) -14.7%. YY -9.3%. Bitauto (NYSE:BITA) -8.8%. JD.com (NASDAQ:JD) -9.6%. Vipshop (NYSE:VIPS) -15.9%.
    • Alibaba (previous) is down 9.8% to $61.48, making new post-IPO lows along the way. Tencent (OTCPK:TCEHY) fell a relatively modest 5% overnight in Hong Kong.
    • ETFs: CQQQ, KWEB, QQQC, EMQQ
    | Mon, Aug. 24, 9:22 AM | 10 Comments
  • Wed, Aug. 19, 2:58 AM
    • Kik Interactive, the Canadian startup behind a popular messaging app, has turned to China's Tencent (OTCPK:TCEHY) for a $50M investment that values it at $1B.
    • With more than 240M registered users, Kik Messenger aspires to become the Western world’s equivalent of WeChat, a messaging app that has expanded to facilitating commerce in China.
    • Kik still has a long road to travel, however, facing stiff competition from the likes of Snapchat, WhatsApp and Facebook's Messenger.
    | Wed, Aug. 19, 2:58 AM | Comment!
  • Wed, Aug. 12, 7:03 PM
    • Tencent (OTCPK:TCEHY) had Q2 revenue of RMB23.43B (+19% Y/Y), below a consensus of RMB24.12B. Net income of RMB7.31B ($1.15B) is nearly in-line with an RMB7.32B consensus.
    • Weighing on sales growth: Online gaming revenue rose 17% Y/Y to RMB12.97B, a slowdown from Q1's 28% growth. In addition, social network revenue rose 18% to RMB5.5B, a slowdown from Q1's 32%. If Tencent had been using gross revenue recognition (doesn't back out partner payments) a year ago, gaming and social growth would've respectively been 11% and 14%.
    • On the flip side, online ad revenue rose 97% to RMB4.07B, after growing 131% in Q1 off a smaller base. Video ad growth led brand display ad sales to rise 47% to RMB2.02B; social ad sales led performance-based (cost per click) ad sales to rise 196% to RMB2.06B.
    • WeChat/Weixin monthly active users (MAUs) rose by 51M Q/Q to 600M. The QQ messaging/gaming platform saw MAUs rise by 11M Q/Q to 843M (627M on "smart devices"), and the Qzone social networking platform saw MAUs drop by 9M to 659M (574M on "smart devices"). Fee-based value-added subscriptions fell by 4% Y/Y to 84M.
    • Boosting earnings: Sales/marketing spend fell 19% Y/Y to RMB1.6B. G&A spend rose 16% to RMB4B. Going forward, Tencent plans to focus its smartphone game development efforts on titles it thinks "can create or re-define important mobile game genres."
    • Earnings Release (.pdf)
    | Wed, Aug. 12, 7:03 PM | 1 Comment
  • Wed, Aug. 5, 3:54 AM
    • China is setting up cybersecurity police units at major Internet companies, a move aimed at strengthening the government's grip on the world's largest population of Web users.
    • The officers will be added to help boost defenses against crimes such as fraud and "spreading of rumors."
    • Beijing is also discussing a separate plan to build a national cyber safety net, enabling national and local governments to cut Internet access when needed.
    • Related tickers: BABA, BIDU, OTCPK:TCEHY
    | Wed, Aug. 5, 3:54 AM | 12 Comments
  • Mon, Aug. 3, 7:03 PM
    • Ctrip (NASDAQ:CTRP) is guiding for 45%-50% Y/Y RMB-based revenue growth. Consensus in dollars is for 43% growth.
    • The modest size of Ctrip's Q2 sales beat could be disappointing investors, after a much bigger beat was delivered in May. Hotel (accommodation) revenue rose 47% Y/Y (volume +55%) to $178M, transportation (ticket) revenue 45% to $170M (volume +106%), packaged tour revenue 61% to $53M, and corporate travel revenue 34% to $19M.
    • R&D spend rose 66% Y/Y to $128M, sales/marketing 42% to $109M, and G&A 34% to $42M. Gross margin was 71% vs. 70% in Q1 and 72% a year ago.
    • Meanwhile, in tandem with its Q2 results, smaller Chinese online travel firm eLong (NASDAQ:LONG) has announced the receipt of an $18/share offer from messaging/gaming giant Tencent (OTCPK:TCEHY) to buy all of the eLong shares not currently owned by Tencent, certain members of management, and "major shareholders" controlling at least 70% of all voting rights.
    • Tencent owns 15% of eLong. In May, Ctrip spent $400M to take a 37.6% stake in eLong.
    • CTRP -1.7% AH to $70.25. LONG +10.1% to $15.65.
    • Ctrip: Q2 results, PR. eLong: Q2 results, PR.
    | Mon, Aug. 3, 7:03 PM | 2 Comments
  • Fri, Jul. 10, 1:58 AM
    • Six former employees of Tencent's (OTCPK:TCEHY) online video business have been arrested by Chinese authorities in connection with a bribery investigation.
    • Among the detained is Patrick Liu Chunning, head of Alibaba's (NYSE:BABA) digital entertainment unit, who was previously a senior executive at Tencent's online video business.
    • "This issue is related to his time at Tencent and has nothing to do with Alibaba," an Alibaba spokesman said.
    | Fri, Jul. 10, 1:58 AM | 4 Comments
  • Tue, Jun. 30, 9:04 AM
    • Cheetah Mobile (NYSE:CMCM) has amended its alliance with Chinese gaming/messaging giant Tencent (OTCPK:TCEHY) to increase the annual cap for payments made by Tencent for promotional services provided by Cheetah (via its apps) to RMB250M ($40.3M) from RMB105M ($16.9M). The alliance was originally formed in late 2013.
    • Tencent paid Cheetah RMB64.3M over the first 4 months of the year. Cheetah's rapid growth - its mobile monthly active users reached 443.6M in Q1, +12% Q/Q - has increased its potential value to Tencent as a promotional/distribution platform.
    • Cheetah has risen to $29.50 premarket. The company joined other Chinese tech names in selling off hard yesterday.
    | Tue, Jun. 30, 9:04 AM | 1 Comment
  • Sun, Jun. 14, 11:19 AM
    • Alibaba (NYSE:BABA) is planning to build China's version of Netflix (NASDAQ:NFLX) and HBO (NYSE:TWX) via a new service called Tmall Box Office.
    • "We want to create a whole new family entertainment experience," Alibaba's Liu Chunning told reporters in Shanghai.
    • TBO will launch in about two months, with content bought from China and other countries, as well as in-house productions.
    • Related tickers: Tencent (OTCPK:TCEHY), Baidu (NASDAQ:BIDU), Sohu (NASDAQ:SOHU)
    | Sun, Jun. 14, 11:19 AM | 69 Comments
  • Wed, May 27, 11:09 PM
    • As media ratings continue to move into the digital age, Nielsen (NYSE:NLSN) says it's partnering with Tencent Holdings (OTCPK:TCEHY) to launch Digital Ad Ratings, looking to tap a bigger share of a $31B market.
    • The move is a push to track unique statistics for an ad across multiple platforms for the first time in China, just as Tencent is pushing to increase mobile ad revenue.
    • Nielsen will measure campaigns using surveys of 46,000 Chinese consumers and aggregate data from Tencent's hundreds of millions of users. Tencent's mobile messaging client WeChat boasts 500M monthly active users.
    • Nielsen says it worked with publishers and advertisers in developing the system, and it plans to roll it out to other companies in China as well.
    • Competitor comScore (NASDAQ:SCOR) says its similar service is already available in China.
    | Wed, May 27, 11:09 PM | Comment!
  • Mon, May 18, 3:10 PM
    • Bloomberg reports Baidu (BIDU -0.8%) is teaming with top ride-sharing platform Uber and P-E firm Apax Partners to jointly bid for Nokia's (NOK +0.7%) HERE mapping/navigation software unit. Sources state the business could fetch as much as $4B.
    • A rival group consisting of Chinese messaging/gaming giant Tencent (OTCPK:TCEHY), Chinese mapping firm/Tencent partner NavInfo, and Swedish P-E firm EQT Partners is also reportedly bidding. A group of German automakers (mentioned in past reports) and a trio of P-E firms are reportedly interested as well, and Microsoft (NASDAQ:MSFT) has offered to buy a minority stake.
    • The next round of bids are reportedly due in 2 weeks. Baidu is said to be partnering with Uber to "avoid regulatory scrutiny." The NYT previously reported Uber has bid up to $3B for HERE, which has a dominant position in the in-car automotive market.
    • Separately, Baidu has announced a "strategic investment" in content recommendation platform Taboola - readers may be familiar with the "Recommend for you" article boxes Taboola provides at the bottom of articles on partner sites. The WSJ reports Baidu, which plans to bring Taboola's platform to China, invested $20M-$30M.
    | Mon, May 18, 3:10 PM | 66 Comments
  • Wed, May 13, 1:11 PM
    • Tencent (OTCPK:TCEHY) had Q1 revenue of RMB22.4B ($3.65B), up 22% Y/Y and topping an RMB22.08B consensus. Net income rose 7% to RMB6.88B ($1.12B), topping an RMB6.45B consensus. Free cash flow rose 53% to RMB8.35B ($1.36B). (earnings release - .pdf)
    • WeChat/Weixin growth remained strong: Monthly active users rose 10% Q/Q and 39% Y/Y to 549M; Q/Q growth accelerated from Q4's 7%. The older QQ messaging/gaming platform had 832M MAUs (603M on smart devices), +2% Q/Q but -2% Y/Y. The Qzone social networking platform had 668M MAUs (568M on smart devices), +2% Q/Q and +4% Y/Y.
    • Driving the Q1 beat: Online ad sales rose 131% Y/Y to RMB2.72B. Brand display ad sales rose 90%, and performance-based (i.e. click-based) sales 199%. Tencent chalks up the growth to video ad sales and WeChat/Qzone click ad growth. 40% of brand ad and 75% of performance ad revenue came from mobile.
    • Online game revenue rose 28% to RMB13.31B (still 59% of revenue), and social networking revenue (subscription-driven) 32% to RMB5.31B. Mobile gaming growth continues to lift online gaming sales. "Other" revenue fell 63% to RMB1.05B thanks to the shifting of e-commerce sales to JD.com.
    • Gross margin rose to 60% from 58% a year ago. Sales/marketing spend fell 29% Y/Y to RMB1.3B thanks to lower promotional activity, while G&A spend rose 25% to RMB3.7B.
    • Along with the numbers, Tencent has announced plans to ramp its efforts to monetize WeChat: The company will begin showing more ads in WeChat's Moments news feed after testing them in Q1, and is open to investing more in WeChat's mobile payments service (competes against Alibaba's Alipay).
    • Last month: Tencent's market cap tops $200B for the first time
    | Wed, May 13, 1:11 PM | Comment!
  • Wed, Apr. 29, 4:33 PM
    • Along with its Q1 results, Glu Mobile (NASDAQ:GLUU) announces Chinese gaming/messaging giant Tencent (OTCPK:TCEHY) is investing $126M in the company through the purchase of 21M shares at $6 apiece. Tencent will own 14.6% of Glu once the deal closes, and Glu will have a $190M cash balance.
    • With Tencent's WeChat mobile messaging platform (~500M MAUs) nearly ubiquitous in China and the company claiming a massive share of the Chinese online/mobile gaming market, the alliance could significantly increase the Chinese reach of Glu's games. Tencent exec Steven Ma will be joining Glu's board.
    • Also announced: Glu is partnering with Britney Spears to launch a new mobile game in 1H16. A 5-year exclusive agreement has been reached with the singer; it features a 3-year extension. The deal comes 3 months after one with Katy Perry, and follows the huge 2014 success of Kim Kardashian: Hollywood.
    • Glu now expects 2015 revenue of $262M-$287M and EPS of $0.20-$0.24 vs. a consensus of $265.6M and $0.25. Q2 guidance is for revenue of $50M-$52M and EPS of -$0.03 to -$0.05 vs. a consensus of $50.9M and -$0.02.
    • The company states its Q1 beat was "driven by the ongoing traction of Kim Kardashian: Hollywood, Racing Rivals, Deer Hunter 2014, and Contract Killer: Sniper." Its strong full-year sales guidance is attributed to an upcoming game lineup that includes "Terminator, Cooking Dash, Deer Hunter 2016, James Bond: 007 and Katy Perry."
    • Glu has surged to $6.26 AH. Q1 results, earnings release.
    | Wed, Apr. 29, 4:33 PM | 19 Comments
  • Tue, Apr. 28, 3:41 AM
    • Taking on domestic rivals in the smart hardware space, Tencent (OTCPK:TCEHY) has launched an operating system for internet-connected devices such as TVs and watches that will be open to all developers.
    • Tencent Operating System and TOS+ mirrors Google's Android mobile OS, and will allow manufacturers and developers to freely use the platform if they agree to share revenue.
    | Tue, Apr. 28, 3:41 AM | 1 Comment
  • Fri, Apr. 17, 9:46 AM
    • 58.com (WUBA +5.2%) is buying a 43.2% stake in Chinese online classifieds rival Ganji.com for 34M shares (current value of $2.4B) and $412.2M in cash.
    • The companies will "continue to operate their respective brands, websites and teams," while exploring ways to partner and "maximize business synergies." Following the deal, Ganji stands to own a 25% stake in 58.com.
    • Messaging/gaming giant Tencent (OTCPK:TCEHY), which bought a 19.9% stake in 58.com last June, is investing another $400M in the company at a price of $52/share (27% below current levels). Tencent will own a 25.1% stake once the investment closes.
    • The FT reported on Tuesday 58.com and Ganji.com were planning a full-blown merger, while adding (without providing details) the transaction would occur in two stages to appease regulators.
    • After opening lower, 58.com has quickly shot higher. Shares are up 39% since the FT's report arrived.
    • Yesterday: Morgan Stanley sees major 58/Ganji synergies
    • Update (12:10PM): 58.com is now down 1.6% amid a broader market selloff.
    • Update 2 (3:00PM): Shares have reversed course again. They're now up 3.9%.
    | Fri, Apr. 17, 9:46 AM | Comment!
  • Tue, Apr. 14, 7:04 AM
    • After hitting a $200B market cap yesterday, Tencent (OTCPK:TCEHY) slumped for the first time in 10 days today as billionaire Chairman Ma Huateng decreased his stake in the tech firm.
    • According to filings, Ma cut his holdings to 9.65% from 9.86%, raising a combined HK$3.2B ($415M).
    • The stock fell 5.5% in Hong Kong, its most in almost a year, leading the benchmark Hang Seng index down 1.6%.
    | Tue, Apr. 14, 7:04 AM | 3 Comments
  • Mon, Apr. 13, 10:27 AM
    • Following a 5.7% gain overnight in Hong Kong, Tencent (OTCPK:TCEHY) is worth over $200B for the first time in its history. The messaging/gaming giant's current $206.5B market cap trails only Alibaba's ($212.2B) among Chinese tech companies, and is sixth among tech firms worldwide (behind Apple, Google, Microsoft, Facebook, and Alibaba).
    • Tencent now trades for 16x 2014 sales and 53x 2014 earnings. Its gains come as many U.S.-traded Chinese peers trade far below their early-2014 highs.
    • Last month: Tencent's Q4 revenue up 24% Y/Y; WeChat MAUs top 500M
    | Mon, Apr. 13, 10:27 AM | 3 Comments
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Company Description
Tencent Holdings Limited provides Internet, mobile, and telecommunication value-added services in China. The Company has an instant messaging community in China. Tencent also provides online advertising services.
Sector: Technology
Country: China