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Tencent Holding Ltd. ADR (TCEHY)

- OTCPK - Current
  • 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 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.”
  • 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 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)
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  • 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 +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.
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  • 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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  • Feb. 28, 2014, 2:16 PM
    • Over the last 48 hours, Baidu, Dangdang, Youku, and have all posted Q4 beats and provided strong Q1 guidance. The numbers are giving a lift to a slew of Chinese Internet stocks.
    • Notable gainers: SOHU +6.5%. PWRD +13.2%. VIPS +4.3%. YY +2.2%. RENN +3.8%. GOMO +5.5%.
    • In Sohu's case, the rumor mill might also be helping out. A source tells Marbridge Consulting Sohu CEO Charles Zhang and Tencent (TCEHY +1.2%) CEO Pony Ma have talked about merging their companies' online video units. Both Sohu and Tencent trail market leaders Youku and Baidu in China's burgeoning online video market.
    • Dangdang (DANG +8.6%) is adding to yesterday's big post-earnings gains after Oppenheimer hiked its PT to $15. The firm likes Dangdang's improved efficiency and partnerships with e-commerce rivals (inc. Alibaba's Tmall), and the fact mobile accounted for 13% of Q4 orders.
  • Jul. 24, 2013, 2:51 PM
    Electronic Arts (EA +8.2%) has soared to new 52-week highs following its big FQ1 beat and in-line FY14 guidance; Activision (ATVI +1.1%) and Take-Two (TTWO +1%) are up moderately. EA managed to grow its Battlefield 3 Premium sub base by 500K Q/Q to 4M+, and mobile revenue rose 33% Y/Y to $104M (21% of total) thanks to in-app purchases for The Simpsons: Tapped Out and Real Racing 3. Home console ($191M) and PC ($175M) revenue both fell 6% Y/Y. While total revenue rose 1% Y/Y, opex fell 3% thanks to recent job cuts. Also: EA has announced it's partnering with Chinese gaming giant Tencent (TCEHY.PK) to bring FIFA Online 3 to China. Wedbush is pulling EA from its Best Ideas list, arguing a lot of good news is priced in, but maintaining an Outperform. (transcript)
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  • Mar. 20, 2013, 10:57 AM
    Solid earnings from Tencent (TCEHY.PK) and a rally in Shanghai help Chinese Internet stocks trade higher. YOKU +3.8%. SINA +2.8%. QIHU +2.5%. SOHU +1.8%. YY +1.8%. NTES +1.5%. PWRD +1.7%. Tencent, which rose 1.5% in Hong Kong, reported a 53% Y/Y increase in Q4 sales to $1.96B, and a 37% increase in net income to $557M. Ad sales were better than expected, and value-added service sales (includes online games) rose 32%. Registered accounts for Tencent's WeChat mobile IM platform, which competes with Sina's Weibo, have topped 300M.
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  • Feb. 20, 2013, 9:27 AM
    Sina (SINA) +7.6% as praise pours in for its Q4 beat, which was highlighted by growing Weibo revenue (20% of total). Stifel predicts Weibo, which produced a 2011/2012 surge in R&D spend, will turn an operating profit in Q4. On its earnings call, Sina admitted Tencent's (TCEHY.PK) WeChat mobile messaging platform, which now has 300M registered accounts, contributed to a "slight decrease in average time spent" by Weibo users. But it insisted Weibo and its 500M+ accounts now have a "critical mass," and said it's investing heavily to increase Weibo's mobile reach.
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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