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Tencent Holdings: Emerging Market Stock Of The DayEmerging Money • Nov 15, 2012
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TCEHY vs. ETF Alternatives
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. More
Wednesday, Nov 202:17 PMTechCrunch: Tencent bit off a piece of Snapchat
Wednesday, Nov 202:17 PM| Comment!
- Facebook's $3B and Google's $4B acquisition attempts were reportedly rebuffed, but Tencent (TCEHY) got in as an undisclosed minority investor in Snapchat's last $60M round, TechCrunch writes.
- The Chinese giant was allegedly mulling over another investment in the app maker last month as well, this time in a potential $200M round that would value the company at $3B-$4B. The move follows a similar line Tencent took in its expansion bid in South Korea, where it acquired a 14% stake in leading messaging app Kakao Talk.
Saturday, Oct 261:11 PMWSJ: Tencent mulling Snapchat investment
Saturday, Oct 261:11 PM| 1 Comment
- Tencent (TCEHY) is considering an investment in ephemeral photo messaging app maker Snapchat, The WSJ reports. Snapchat is said to be looking to raise up to $200M at a valuation of $3B-$4B. It has already scored $73M in venture funding, most recently hauling in $60M in June.
- Founder Evan Spiegel has been open about his admiration of Tencent and its monetization strategy on a number of occasions. Tencent's own foray into messaging, WeChat, boasts 236M active users.
- Tencent has ramped up its overseas investments as of late. It has invested over $2B to create a portfolio that includes start-ups such as Fab.com, Everyme, Ark, Sonalight, Loom, Watsi, Couple, and Waddle.
- While a relationship could aid Snapchat in an effort to gain a foothold in Asia and monetize its user base, Tencent stands to benefit from expanding its reach in mobile as it battles Alibaba and Baidu.
Friday, Oct 114:33 PMActivision closes Vivendi deal, related share sale
Friday, Oct 114:33 PM| Comment!
- A day after Delaware's Supreme Court cleared the way for the deals to proceed, Activision (ATVI +0.2%) says it has closed its $5.83B, $13.60/share leveraged recap deal with Vivendi (VIVHY.PK), and that Vivendi's sale of $2.34B in shares (also at $13.60/share) to an investment group led by Activision's CEO and co-chairman has also been finished. (PR)
- Not surprisingly, Activision predicts the leveraged recap, which was financed via $4.75B in debt (average interest rate below 5%) and $1.2B in existing cash, will be immediately accretive to EPS.
- The two deals leave the investment group, which also features private investment firms and Chinese online gaming giant Tencent (TCEHY.PK), with a 24.7% stake in Activision. Vivendi retains a 12% stake.
Friday, Sep 2710:13 AMChinese government lifting console ban
Friday, Sep 2710:13 AM| 5 Comments
- China's State Council says gaming consoles, banned since 2000, will be allowed for sale provided they're approved by the Ministry of Culture. The decision opens the door for Microsoft (MSFT +1.1%), Sony (SNE -0.7%), and Nintendo (NTDOY.PK) to begin officially selling their hardware in the Middle Kingdom.
- Unofficially, the hardware hasn't been hard to find on the black market, with sellers typically hawking modified systems that support pirated games. However, the government's decision should open the door for console makers and game developers (EA, ATVI, TTWO) to formally market their wares, replete with Chinese-language translations.
- Aside from piracy, China's well-established online gaming scene will serve as a challenge for console makers and game developers. Some of the online gaming firms they'll be competing against: TCEHY.PK, NTES, GA, GAME, PWRD, CYOU.
- Microsoft just formed a 49:51 console JV with local firm BesTV.
- Previous: Chinese government reportedly planning to end console ban
Tuesday, Sep 2411:11 AMReport: China to lift Facebook, Twitter bans within free-trade zone
Tuesday, Sep 2411:11 AM| 4 Comments
- In what could be a trial balloon, the Chinese government plans to lift its ban on "politically sensitive" foreign websites in Shanghai's new free-trade zone, according to government sources talking to Hong Kong's South China Morning Post. Facebook (FB +4.7%), Twitter, and the New York Times are among the sites that will reportedly be made accessible.
- In addition, the government plans to allow foreign carriers to bid for licenses to provide Internet services in the free-trade zone. State-owned carriers China Mobile (CHL -0.8%), China Telecom (CHA -1.8%), and China Unicom (CHU -2.8%) have all reportedly been informed foreign companies will be able to compete with them in the area.
- For now, the zone only covers 29 sq. km. But sources state it could eventually cover Shanghai's entire Pudong business district (1,210 sq. km), home to the Shanghai Stock Exchange and arguably China's most vital commercial hub.
- The report comes shortly after Facebook COO Sheryl Sandberg met with Chinese Web regulators. China already has a well-developed social networking scene, with Tencent (TCEHY.PK) and SINA claiming hundreds of millions of registered users for their respective platforms.
Monday, Sep 1611:44 AMBaidu higher after Sogou merges with Tencent instead of Qihoo
Monday, Sep 1611:44 AM| 1 Comment
- Though Tencent's (TCEHY.PK, TCTZF.PK) acquisition of a 36.5% stake in Sohu's (SOHU +6.9%) Sogou search unit stands to make Sogou a greater threat to Baidu (BIDU +2%), given Tencent's plans to promote Sogou throughout its messaging/gaming empire, Baidu investors appear relieved Qihoo, which was in talks with Sohu, didn't end up reaching a deal.
- Research firm CNZZ recently estimated Qihoo now has over 15% of the Chinese search market, and the company itself recently pegged its share at 20%. Acquiring Sogou (estimated 8.8% share) would've given Qihoo additional scale and resources as it challenges Baidu's dominant position.
- Meanwhile, Tencent rose 2.5% in Hong Kong overnight, before the Sogou deal was announced. The company's market cap has topped $100B.
- Chinese Web giants Baidu, Tencent, and Alibaba are increasingly stepping on each others' toes. While Tencent and Alibaba have been relying on partnerships/minority investments to grow their reach, Baidu has been more interested in acquisitions and controlling stakes.
Monday, Sep 168:23 AMSohu pops, Qihoo drops after Tencent buys stake in Sogou
Monday, Sep 168:23 AM| Comment!
- SOHU gains 6.4% premarket after announcing a strategic cooperation deal with Tencent (TCEHY.PK, TCTZF.PK), initiated by Tencent investing $448M and the two merging their search businesses. After the deal, Tencent will own 36.5% of Sogou's equity capital, which could further increase to 40% in the near future.
- Off 5% premarket is Qihoo (QIHU) which had been speculated as the buyer of Sohu's Sogou search unit.
- Press release.
- Conference call to discuss the transaction begins at 8:30 ET.
Friday, Aug 3012:48 PMJ.P. Morgan likes Qihoo, Tencent among China mobile internet
Friday, Aug 3012:48 PM| Comment!
- The China mobile internet sector has collected enough users, J.P. Morgan says, and prefers Qihoo (QIHU -0.7%) and Tencent (TCEHY.PK, TCTZF.PK) because they have already amassed large mobile platforms.
- Both companies should continue to capitalize on China’s booming mobile economy, the firm says; it expects Tencent to capture 30%-35% mobile game share by the end of 2014 through content development and distribution, while QIHU could take 10% through distribution.
- The firm cuts Youku (YOKU -2.7%) and Sohu (SOHU -2.1%) to Neutral from Overweight.
- JPM also likes online real estate services platform Soufun (SFUN +4.6%) for its market leading position; users seem sticky and barrier to entry seems high.
Friday, Aug 2311:47 AMSina launching new social media platform to challenge Tencent
Friday, Aug 2311:47 AM| 1 Comment
- Sina (SINA +0.2%) CEO Charles Chao: "We are going to launch a new social media product, complementary to Weibo, that focuses more on groups ... It has chat, news feed, pictures."
- Sina's clear goal is to challenge Tencent's (TCEHY.PK) WeChat mobile messaging/social networking platform, which continues to grow at a manic pace (monthly active users +21% Q/Q in Q2 to 236M). Sina admitted earlier this year WeChat's popularity has affected the amount of time spent on Weibo (daily active users +8% Q/Q in Q2 to 54M).
- Assuming existing Weibo users can log into the new platform with their Weibo usernames, Sina should have a healthy installed base to work with. The company should also be able to count on Alibaba for additional support (previous).
- But given the size of WeChat's base, disrupting Tencent's momentum will still be an uphill battle, as Chinese mobile carriers attempting to do the same can vouch.
Monday, Aug 1912:12 PMNetEase, China Telecom partner in effort to take on Tencent
Monday, Aug 1912:12 PM| Comment!
- China Telecom (CHA +1.4%) and NetEase (NTES +7.2%) are creating a JV that will launch YiChat, a "social" smartphone messaging app.
- The companies are clearly looking to challenge 800-lb. gorilla Tencent (TCEHY.PK) and its dominant WeChat mobile messaging/social networking platform. WeChat's monthly active users rose another 21% Q/Q in Q2 to 236M. Moreover, Tencent boasts average daily usage of 5.3x/user/day.
- WeChat's traffic-hogging ways have upset Chinese carriers. However, Tencent stated in May it has reached "preliminary solutions" (likely involving payments to the carriers) to address the issue.
- NetEase and China Telecom assert YiChat will be differentiated by its support for free text and voice messages (whether or not the recipient has installed YiChat), as well as by noise-reduction tech and the bundling of "free data promotional packages."
- China Mobile (CHL +0.5%) is also trying to challenge Tencent, courtesy of its Fetion messaging platform. Fetion claimed 99M active users earlier this year, but its growth has been notably slower than WeChat's. SINA's Weibo microblogging platform (now backed by Alibaba) also competes in this space.
Wednesday, Aug 148:04 PMShanda Games rebounds on strong Tencent numbers
Wednesday, Aug 148:04 PM| Comment!
- Shanda Games (GAME +10.8%) rallied strongly after competitor Tencent (TCEHY.PK) announced gaming revenue grew 31% Y/Y in Q2 to 7.5B yuan.
- With today's move, Shanda recovered some of the losses stemming from its questionable affiliate acquisitions on July 29.
- The stock remains down 29% since the announcement.
Thursday, Aug 11:34 PMSina rallies as Alibaba bans Tencent's WeChat, deepens Weibo integration
Thursday, Aug 11:34 PM| 1 Comment
- Three months after buying an 18% stake in Sina (SINA +5.4%), Alibaba has banned sellers on its very popular Taobao marketplace and Tmall e-commerce site from using Tencent's (TCEHY.PK) WeChat mobile IM platform, citing user complaints about WeChat messages from sellers.
- WeChat is seen as the biggest rival to Sina's Weibo microblogging platform. WeChat claimed 194M monthly active users as of May; Weibo's MAUs are around 50M. Sina recently admitted WeChat is affecting Weibo activity.
- While it bans WeChat, Alibaba plans to allow Taobao purchases to be directly made from Weibo. Additional efforts to integrate Weibo with Alibaba's sites are likely on the way.
- Alibaba and Tencent are turning into bitter rivals, as the former expands its social networking reach and the latter makes e-commerce forays.
Wednesday, Jul 242:51 PMElectronic 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) |Wednesday, Jul 242:51 PM| Comment!
Friday, Jul 127:11 PMWaning Chinese interest had much to do with Activision (ATVI) net loss of 1.3M World of Warcraft subs in Q1. Like some U.S. peers, many Chinese gamers have begun to eschew advanced MMORPG titles such as WoW in favor of casual and mobile games. That trend works against Activision and local partner NetEase (NTES - previous), and to the benefit of gaming/messaging giant Tencent (TCEHY.PK). T.H. Capital thinks Activision may have seen an uptick in Chinese WoW users in Q2, but sees engagement continuing to fall. NetEase has been decommissioning unused game servers, and says it plans to launch more "competition type of games." Update: SA commenter Skylander2011 points out the spread of gold farming is alienating Chinese WoW users. |Friday, Jul 127:11 PM| 4 Comments
Friday, Jul 1211:54 AMThe Chinese government is reportedly planning to end a 13-year ban on game console sales, on the condition the consoles are made in a proposed Shanghai free trade zone. The legalization of console sales could be a modest negative for Chinese online gaming firms such as NTES, GA, GAME, PWRD, CYOU, and TCEHY.PK, but TechInAsia thinks Sony (SNE) and Nintendo (NTDOY.PK) investors shouldn't rush to celebrate. Consoles aren't hard to find on the black market today, and buyers tend to go for hacked systems that support pirated games. On the other hand, legalization will allow console vendors to advertise in China and sell translated titles. |Friday, Jul 1211:54 AM| 1 Comment
Tuesday, Jul 95:30 PM"We are ready, and we can do an IPO any time," says new Alibaba CEO Jonathan Lu in remarks to the WSJ that should please Yahoo (YHOO) investors. Lu declares both NYC and Hong Kong to be "suitable" locations for an IPO, but (in what could be a hint) says Alibaba is more familiar with the latter's rules. Lu also mentions Alibaba, fresh off buying stakes in Sina and AutoNavi, will pursue more deals to strengthen its mobile hand, as it contends with growing e-commerce competition from messaging/gaming giant Tencent (TCEHY.PK). (Reuters IPO report) (logistics network) (Q4 results) |Tuesday, Jul 95:30 PM| 2 Comments