Yesterday, 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, Mar. 18, 2:10 PM
- Tencent (OTCPK:TCEHY) had Q4 revenue of RMB20.98B ($3.43B), +24% Y/Y (slightly slower than Q3's 28% growth) and beating a consensus of RMB20.5B. Net income attributable to equity holders rose 51% to RMB6.72B, beating a consensus of RMB6.26B. Free cash flow rose 72% to RMB9.18B ($1.47B).
- WeChat monthly active users (MAUs) rose 7% Q/Q and 41% Y//Y to 500M. WhatsApp (700M+ MAUs) and Facebook Messenger (just reached 700M) are the only mobile messaging platforms with larger bases.
- The QQ messaging/gaming platform had 815M MAUs, up 1% Y/Y but down by 5M Q/Q; 576M QQ users are now on "smart devices." The Qzone social networking platform saw MAUs rise 4% Q/Q and 5% Y/Y to 654M (540M on smart devices).
- Tencent continues towering over China's gaming industry: Online game revenue rose 41% Y/Y to RMB12B, fueled by mobile WeChat/QQ gaming growth. Going forward, Tencent aims to "diversify and capitalize on our strong title pipeline for PC and mobile games to penetrate into new genres."
- Social networking revenue rose 50% to RMB5.2B, aided by in-game purchases and subscription revenue growth. Online ad revenue rose 75% to RMB2.6B (video ads provided a lift), while e-commerce revenue fell 87% to RMB446M thanks to the JD.com partnership. "Other" revenue sources rose over 3x to RMB768M.
- G&A spend rose 44% to RMB4B, while sales/marketing rose just 1% to RMB2.1B. Op. margin rose to 35% from 28%.
- President Martin Lau argues ad monetization and low mobile gaming payment rates and leave plenty of room for future growth. "Facebook has been able to build a very large advertising business on a social network. Advertising will be a major contributor to our revenue.”
Mon, Feb. 16, 5:17 PM
- Ford (NYSE:F) confirms it's in talks with Tencent (OTCPK:TCEHY) over adding hands-free apps to models in China.
- A partnership which includes Tencent's popular WeChat app (+375M domestic active users) could have high strategic value for the automaker.
- Last summer, GM joint venture Shanghai OnStar launched a limited platform with Tencent.
Mon, Feb. 16, 12:41 PM
- Select Chinese automobile industry stocks rose today in reaction to Friday's reports on Apple's interest in the electric vehicle market.
- BYD Group (BRK.A, BRK.B) was up 11% in Hong Kong trading off speculation the company could partner with Apple on an EV project.
- NavInfo rose 10% in Shenzhen with the company viewed as ripe to see an investment from Apple. Tencent (OTCPK:TCEHY) has a double-digit stake in NavInfo.
- Shares of parts maker Ningbo Joyson Electronics were up 10% in Shanghai. Ningo is becoming a bigger player in the Chinese automobile industry through acquisitions.
- Kandi Technologies (NASDAQ:KNDI) is also a stock to watch to see if the Apple sphere of influence touches it.
- Previously: WSJ: Apple car project is for real, and it's a minivan (Feb. 13 2015)
- Previously: Apple aftershocks: Maybe it's Toyota that should be worried? (Feb. 14 2015)
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. 16, 2014, 5:01 AM
- Tencent (OTCPK:TCEHY) has struck the latest in a string of music distribution deals, this time with Sony Music Entertainment (NYSE:SNE), as it teams up with labels to try to develop China's paid-for music market.
- In November, the company signed a similar music distribution partnership with Warner Music Group.
- Tencent is also investing heavily in content for its online video site, with a China streaming deal with U.S. network HBO and video subscription service through Disney.
Dec. 10, 2014, 1:35 PM
- After announcing the creation of the Emerging Markets ex-State-Owned Enterprises Index yesterday, WisdomTree rolled out the the WisdomTree Emerging Markets ex-State-Owned Enterprises Fund (NYSEARCA:XSOE) this morning.
- According to WisdomTree's blog post for the launch, XSOE "provides investors with a way to capitalize on the opportunities of emerging markets without the politics involved with state-owned enterprises."
- Top holdings in the fund include Tencent Holdings (OTCPK:TCEHY), Samsung Electronics (OTC:SSNHY) and Baidu (NASDAQ:BIDU); two companies out of China and one from South Korea.
- Other emerging market ETFs: EEM, VWO, EDC, EDZ, SCHE, IEMG, EEV, ADRE, EET, EUM, GMM, EEME, DBEM, EMCR, FEM, EWEM, EMLB, HEEM, EMSA, EMFT
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. 25, 2014, 4:58 AM
- Looking to expand its audience in China, HBO (NYSE:TWX) has signed a deal with Tencent (OTCPK:TCEHY) to distribute its TV dramas and movies through the Chinese Internet giant’s online video site.
- Under the terms of the agreement, Tencent Video platform will be the exclusive online distributor of HBO programs in the country.
- The deal will begin in the near future.
Nov. 13, 2014, 9:07 AM
- Tencent Holdings (OTCPK:TCEHY) signs a deal with Warner Music Group to distribute music offerings to its massive array of users.
- The new pact broadens an existing relationship between the two companies.
- Warner has made a bigger push into China this year than rivals Vivendi and Sony Music Entertainment.
- Privately-owned Access Industries owns Warner Music Group.
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)
TCEHY vs. ETF Alternatives
Other News & PR