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. 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.
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.
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.
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%.
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%.
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
Wed, Apr. 8, 10:58 AM
- Following a big overnight rally in Hong Kong (followed a 3-day holiday during which Shanghai rallied), beaten-down Chinese Internet and mobile stocks have soared in U.S. trading.
- The biggest gainers include many names that are far below their 2014 highs: The group includes Qihoo (QIHU +10.5%), YY (YY +14.9%), Taomee (TAOM +14.3%), Sina (SINA +8.7%), and Weibo (WB +12.1%). Mobile game publishers Sky-mobi (MOBI +12.6%), China Mobile Games (CMGE +8%), and iDreamSky (DSKY +13.4%) are also sharply higher, as are online real estate plays SouFun (SFUN +13.1%), E-House (EJ +6.1%), and Leju (LEJU +9.8%).
- Giants Alibaba (BABA +3.4%) and Baidu (BIDU +4.1%) aren't being left out. Neither are Youku (YOKU +7.5%), 21Vianet (VNET +7.4%), Momo (MOMO +6.8%), Sohu (SOHU +7.7%), Changyou (CYOU +4.5%), Dangdang (DANG +7.3%), Vipshop (VIPS +4.8%), JD.com (JD +3.9%), Jumei (JMEI +6.6%), Sungy Mobile (GOMO +5.8%), China Techfaith (CNTF +7.1%), and KongZhong (KZ +5.5%).
- Alibaba has proposed an asset injection into its money-losing Alibaba Pictures (+36% in Hong Kong) film arm. Sky-mobi has seen Rosenblatt (Buy) hike its target to $11, while noting many Chinese mobile game developers have been bought out; it thinks Sky-mobi's investments in developers could be worth $140M. NetEase has been upgraded by CICC Research.
- Over in Hong Kong, software/cloud services provider Kingsoft (OTCPK:KSFTF) rose 24.2% to HKD$29.50. Messaging/gaming giant Tencent (OTCPK:TCEHY) rose 3.3% to HKD$154.80.
- ETFs: KWEB, CQQQ, QQQC
Fri, Mar. 20, 12:20 PM
- #3 Chinese search engine Sogou is planning an IPO that will feature a $3B+ valuation, Bloomberg reports. Sources add Sogou, which is controlled by Sohu (SOHU +3.7%), could see an offering in 2H15.
- Sogou has been easily outgrowing Sohu's portal and gaming ops: Its revenue rose 70% Y/Y in Q4 to $119M. It had an estimated 6.9% Q4 Chinese search share, trailing Baidu's (NASDAQ:BIDU) 74.4% and Qihoo's (NYSE:QIHU) 17.3%.
- Tencent (OTCPK:TCEHY) bought a 40.9% stake in Sogou in 2013 for $516M, and has integrated Sogou's services with its wildly popular WeChat mobile messaging platform (recently hit 500M MAUs). Aside from search, Sogou's services include a Web directory, games, and popular Chinese-language typing software (Sogou Pinyin).
Wed, Jan. 21, 2:55 PM
- Alibaba (BABA +3.5%) and Baidu (BIDU +3.6%) have posted big gains in U.S. trading after the Shanghai Composite rose 4.7% overnight (its biggest gain in 5 years). China's other Internet giant, Tencent (OTCPK:TCEHY), hasn't been left out of the fun: Its shares rose 3.8% overnight in Hong Kong, leaving the company sporting a $155B market cap.
- Baidu recently received positive pre-earnings commentary from Deutsche, which argued mobile monetization is improving rapidly. The firm observed Baidu hiked the minimum bid price for mobile keywords as a % of PC keyword prices to 30% from 10%, and suggested Baidu's alliance with fast-growing Android OEM Xiaomi could provide a boost. Mobile accounted for 36% of Baidu's Q3 revenue, and a majority of its traffic.
- Alibaba, which also rallied yesterday, is eight days away from posting its FQ3 report. The consensus is for 47% Y/Y revenue growth, but only 24% EBITDA growth, as investments in new businesses and mobile marketing pressure margins.
Fri, Jan. 9, 10:03 AM
- Chinese mobile messaging/gaming giant Tencent (OTCPK:TCEHY) and leading direct online retailer JD.com (JD +0.8%) are directly investing $1.3B in "cash and resources" in major auto site Bitauto (BITA +8.7%), and $250M in Bitauto's YiXin Capital (online auto financing) subsidiary.
- JD will directly invest $400M in cash in Bitauto and provide $750M in resources, including "exclusive access to the new and used car channels on JD.com's e-commerce sites including mobile apps and additional support from its key platforms," in exchange for shares. Tencent will directly invest $150M in cash. JD and Tencent will respectively invest $100M and $150M in YiXin Capital.
- The deal will leave JD with a 25% stake in Bitauto, and Tencent a 3.3% stake. JD and Tencent will respectively have 17.7% and 26.6% stakes in YiXin Capital. Tencent already has a sizable stake in JD.
- Bitauto, whose shares have soared on the news, promises to "aggressively invest to solidify Bitauto's industry leadership and build market share" in upcoming months. Rival Autohome (ATHM +5.8%) is also up sharply, perhaps on hopes a Tencent/JD rival (Alibaba?) will invest in the company in response.
Dec. 3, 2014, 11:05 AM
- After previously filing to sell 21.8M shares on behalf of existing holders at a maximum offering price of $22.72, JD.com (NASDAQ:JD) is selling 26M shares for them at a price of $23.80.
- China's second-biggest e-commerce firm also states Tencent (OTCPK:TCEHY), which took a 15% stake in JD and formed an alliance with the company prior to its IPO, has bought another $150M worth of shares through the offering. Hedge fund Tiger Global, another major JD investor, has purchased an additional $47.6M worth of shares.
- With a lockup expiration looming, JD's six biggest shareholders, which include Tencent, Tiger, and chairman/CEO Qiangdong Liu, have agreed not to sell shares "for a period of 90 days after the offering."
- Shares +14% over the last two days.
Nov. 12, 2014, 3:10 PM
- Tencent (OTCPK:TCEHY +1.3% in Hong Kong) had Q3 revenue of RMB19.8B ($3.2B), +28% Y/Y but missing a consensus of RMB20.6B. Likewise, net income totaled RMB5.7B ($924M), +46% Y/Y but below an RMB6.2B consensus. Y/Y revenue growth slowed from Q2's 37%.
- WeChat monthly active users (MAUs) totaled 468M at the end of Q3, +7% Q/Q and +39% Y/Y. Q/Q growth slowed from Q2's 11%.
- The older QQ messaging/gaming platform finished with 820M MAUs (542M on "smart devices"), -1% Q/Q and +1% Y/Y. The Qzone social networking platform had 629M MAUs (506M on smart devices), -2% Q/Q and +1% Y/Y.
- Value-added service revenue rose 38% Y/Y to RMB16.1B, thanks to a 35% increase in online game revenue to RMB11.3B (57% of total revenue) and a 47% increase in social networks revenue to RMB4.7B. Online ad revenue +76% to RMB2.4B; e-commerce revenue -81% to RMB459M thanks to the JD.com partnership.
- Gross margin rose 900 bps Y/Y to 64%, which allowed op. margin to rise 700 bps to 38%. Sales/marketing spend rose 30% to RMB1.9B, and G&A spend 44% to RMB3.8B.
- Earnings Release (.pdf)
Aug. 13, 2014, 12:38 PM
- Tencent (OTCPK:TCEHY) had Q2 revenue of RMB19.75B ($3.21B), +37% Y/Y and above an RMB19.2B consensus. Net income rose 59% to RMB5.84B ($948M), above an RMB5.51B consensus.
- WeChat monthly active users (MAUs) rose 11% Q/Q and 57% Y/Y to 438M. MAUs for Tencent's older QQ messaging/gaming platform totaled 829M, -2% Q/Q and +1% Y/Y. MAUs for the Qzone social networking platform totaled 645M, flat Q/Q and +3% Y/Y.
- 521M QQ MAUs and 497M Qzone MAUs are now respectively using "smart devices."
- Total value-added service (VAS) revenue rose 9% Q/Q and 46% Y/Y to RMB15.7B. Within the segment, online gaming revenue rose 7% Q/Q to RMB11.1B, thanks largely to mobile growth - Tencent recently disclosed it now has 600M+ mobile gaming users. PC gaming revenue was "broadly stable." Social networking revenue rose 15% Q/Q to RMB4.6B, thanks largely to mobile.
- Online ad revenue rose 59% Y/Y to RMB2.1B, aided by video/social ad growth. E-Commerce revenue fell 40% to RMB1.3B, thanks to the JD.com (JD +4.3%) partnership. JD shares are rallying.
- Gross margin rose to 62% from 54% a year ago, and op. margin to 40% from 32%. Tencent cautions mobile gaming revenue could be flat in 2H14, as the company focuses on optimizing the user experience.
Jun. 27, 2014, 9:57 AM
- Chinese messaging/gaming giant Tencent (TCEHY) is paying $736M to buy a 19.9% stake in local online classifieds leader 58.com (WUBA -1.4%).
- Tencent is paying the equivalent of $40/share for its stake - 23% below 58.com's current trading levels. 58.com will use some of the proceeds to buy back 27.6M shares ordinary shares (the equivalent of 13.8M ADS) from pre-IPO holders.
- 58.com's services will be integrated with Tencent's QQ and Weixin (WeChat) messaging platforms, which are nearly ubiquitous in China. Both companies have also "agreed to use each other as [their] preferred partner in local services."
- The investment is the latest in a string of major deals by Tencent meant to solidify its Web/mobile empire as it battles with Alibaba and Baidu on a variety of fronts. The latter two companies haven't been standing idly either.
- It looks like some investors knew in advance: 58.com's shares rose 13.8% yesterday ahead of the announcement.
May 14, 2014, 2:19 PM
- Tencent (TCEHY +8.4%) trades higher after reporting better than expected Q1 earnings, as net income soared 60% Y/Y to 6.46B and easily beating the analyst consensus estimate of 4.04B yuan.
- Q1 revenues rose 36% Y/Y to 18.5B yuan; online gaming sales jumped 39%, contributing 56% of Tencent’s total revenue.
- Mobile gaming revenue is beginning to make a significant contribution to revenue, with sales soaring 200% Q/Q to 1.8B and representing 17% of Tencent’s total gaming sales, up from 7% last quarter.
- WeChat and QQ, the two messaging programs, claim 396M monthly active users, up 11.5% Q/Q, and the number of monthly active users for Tencent’s instant messaging service is 848M.
- Numbers like these no doubt will help feed the anticipation for Alibaba’s (ABABA) upcoming IPO.
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