Tencent Holdings Ltd (0700)

[CityFarmer]

Thanks for starting a new thread for Tencent. I merged all other Tencent related threads into this one. This thread will serve as the thread of Tencent, for ease of reference.

Regards
Moderator

[yawnyawn]

(Reuters) - Tencent Holdings Ltd shares slid as much as 6.4 pct amid reports that China's central bank has called for a halt to online credit card use.

The report that the People's Bank of China (PBOC) had issued a statement telling China CITIC Bank Corp, which operates virtual credit cards in cooperation with Tencent and ecommerce firm Alibaba Group Holding, was first reported by 21st Century Business Herald.

Alibaba and Tencent later confirmed to Reuters they had received the notice about the PBOC's plan. A PBOC spokesman said the bank was investigating the reports.

Alibaba announced the new virtual credit cards on Tuesday. The cards can be used to buy goods through its online payment affiliate Alipay, part of its push into offering financial services. Tencent followed with its own credit card announcement on Wednesday.

http://www.reuters.com/article/2014/03/1...0K20140314

I think once the internet companies show that customer information can be secured properly, i see no reason for the PBOC to prevent the usage of the virtual credit cards. It will be a win-win-win for the internet companies(new stream of income), merchants(cheaper fees compared to using Unionpay) and end users.

[yawnyawn]

On 17 Feb 2014,Tencent to buy 20% Stake in Dianping for USD400m
Dianping is like a China's version of HungryGoWhere.

Users

The company last released their stats back in Q3 of 2013. As of Q3 of 2013, Dianping had more than 75 million monthly active users, over 28 million reviews, and more than 6 million local businesses covering approximately 2,300 cities across China. The company is quite unique when it comes to listings. On top of the regular known business listings, the site also list restaurants that you rarely hear about. Some of those listings include street food vendors, street food karts, basement moms and pop food shops and many more. Dianping covers most of the major cities in China and some offshore cities like Macau.

[CityFarmer]

The competition with Alibaba getting very intense...

(not vested)

Tencent Q4 income growth slows on higher advertising spend

BEIJING – Tencent Holdings posted the slowest quarterly income growth in almost two years as it spent big on attracting more users to its flagship mobile chatting app and its e-commerce sites amid intense competition with Alibaba Group Holding.

China’s largest listed Internet firm posted on Wednesday a 12.9 per cent year-on-year rise in net income for the fourth quarter of 2013, in line with forecasts.

The increase was the lowest since the first quarter of 2012, as selling and marketing expenses jumped 39 per cent quarter-on-quarter, largely due to advertising for its WeChat, or Weixin, app and various e-commerce sites.

“Weixin is evolving from a pure communications service into a multi-functional platform,” Tencent said in its earnings statement.

Tencent now plans to “invest in long term opportunities such as online video, online payment and WeChat international expansion,” added Chief Executive Pony Ma.
...
http://www.todayonline.com/business/tenc...sing-spend

[yawnyawn]

Tencent Q42013 Results

VAS
In 2013, our open platforms continued to create value for the Internet industry, and enjoyed significant growth in users and revenues as a result. We believe we have become the partner of choice for application developers in China, offering access to our large logged-in user base, the network effect of our leading social platforms, our targeted advertising solutions, and our proprietary cloud-based infrastructure support. We are extending our open platforms to mobile and targeting to build a cross-platform ecosystem.

The weakness in our VAS subscription services continued in 2013. This was primarily due to rapid adoption of smart phones by users, whereas our paid subscription services are traditionally focused on PC or feature phones. The weakness was also driven by our stringent measures to clean up certain user accounts acquired through mobile channels with low possibility of fee collection. To better align our VAS subscription services with the mobile Internet opportunities, we unified the product teams and product experiences between PC and smart phones, and introduced smart phone-oriented subscription services, such as Super VIP, during the year.

For online games, we consolidated our leading position in China in 2013. While major domestic PC game titles continued to deliver solid growth, we benefited significantly from increased contribution from international markets via LoL, and from the launch of new domestic PC game titles. In the fast-growing mobile game market, we launched our Game Center on Mobile QQ and Weixin, including a range of self-developed and third-party smart phone games. Riding on the extensive user reach and social network effect offered by Mobile QQ and Weixin, these games generated a revenue contribution of over RMB600 million for the fourth quarter of 2013, validating the distribution capabilities of our mobile platforms. We will continue to enrich our game portfolios for PC and mobile. In addition, we will strengthen our mobile distribution platforms to complement the rapid growth of our mobile games.


Online Advertising
Leveraging the growth of our media platforms and social platforms, our online advertising business expanded further in 2013, with revenue growth across the brand display and performance display categories. For brand display advertising, revenues from our online video platform achieved strong growth, driven by increased inventories, improved pricing and enhanced recognition from advertisers. Traditional brand advertising also registered solid revenue growth. For performance display advertising, revenues from our social platforms benefited from growth in impression volume and improved targeting. For search advertising, revenues declined as we transferred our search business to Sogou in September 2013. We believe Sogou is well-positioned to grow its share in the PC and mobile search market after the completion of its integration with SoSo towards the end of 2013.

Longer term, we believe the fast-growing user base and traffic of our mobile platforms will increasingly become an attractive proposition for advertisers. We are exploring different formats of mobile advertising on our platforms to capture the emerging opportunities.


eCommerce Transactions
In 2013, our principal eCommerce transactions business experienced strong growth in transaction volume and revenues as we enhanced our geographic presence, expanded our product range and improved our eCommerce infrastructure. Our marketplaces also registered growth in fee income as we improved product selection and customer service.

Under our strategic partnership with JD.com, we transferred our Wanggou B2C and Paipai C2C marketplace businesses, logistics personnel and assets, as well as a minority stake in Yixun to JD.com, and JD.com has a call option to acquire our remaining stake in Yixun in future. We will support JD.com’s growth in the physical goods eCommerce business by offering level 1 access points at Mobile QQ and Weixin, as well as support from other key platforms to JD.com. Both parties will also cooperate on online payment services to improve users’ online shopping experience.

Outlook and strategies for 2014
During 2014, we intend to leverage our leading communications and social applications to: (1) support a broad portfolio of associated applications spanning activities such as games, entertainment, information, and utilities; (2) popularise our application stores and application distribution platforms; and (3) build a prosperous ecosystem for O2O and mobile eCommerce activities. We also strive to leverage our platforms to accelerate the growth of mobile games, while reinforcing our leadership in PC client games.

We will continue investing heavily in certain long-term projects we deem strategic, including: (1) purchasing content and improving user experience for our online video service; (2) marketing and popularising our WeChat service in selected international markets; and (3) encouraging uptake of our payment solutions, for example via subsidies to consumers and merchants.

We aim to deepen our relationships with strategic business partners such as CSC, Dianping, Dididache, JD.com and Sogou, among others, providing our partners with our full platform support and bringing their products and services to our users.



What i am seeing is that Tencent is making inroads into the mobile gaming, e-commerce and payments, advertising business through merger and acquisitions. They have tied up with Jingdong.com to battle against Taobao & Tmall. Tenpay, has the 2nd biggest market share in the online payment platform, behind Alipay. I believe usage of Tenpay will rise due as more e-commerce deals are completed on JD.com

Tencent is also moving into the mobile gaming segment by purchasing game developers aggressively. They just bought a 28% stake in CJ Games for a cool USD$500m.

Stock is trading at HKD 522 at 50x earnings.
(not vested)

[CityFarmer]

It catches my attention due to a name, Mr Mark Mobius...

(not vested)

Tencent extends Internet stock rout as valuation concerns deepen

HONG KONG – Tencent Holdings slumped to a two-month low and a gauge of Asian Internet companies erased its advance for the year amid growing concern that valuations overshot earnings prospects, the Bloomberg news agency reported.

Tencent tumbled 4.5 per cent to HK$501.50 at the close in Hong Kong, paring its gain during the past five years to 698 per cent. The Bloomberg Asia Pacific Internet Index slid 3.8 per cent, extending its decline from a March 6 high to 15 per cent and its lowest level since Dec 26. SoftBank Corp, which owns a stake in Alibaba Group Holding, sank 4.6 per cent in Tokyo. Naver Corp declined 6.5 per cent in Seoul.

The losses in Asia follow the Nasdaq Composite Index’s biggest retreat in two months on April 4, as investors pare holdings in Internet companies that have led gains in global equities during the past 12 months. The retreat may weigh on investor demand for initial public offerings as Weibo, China’s biggest microblogging outlet, and Alibaba, the nation’s largest e-commerce business, prepare to sell shares in the U.S.

Mr Mark Mobius, who oversees about US$50 billion at Templeton Emerging Markets Group, said he is buying technology stocks after the retreat sent valuations to “reasonable” levels.

“If you look at Tencent for example, it’s come down about 20 per cent and that’s a pretty good correction,” Mr Mobius, whose Templeton Asian Growth Fund has outperformed 88 per cent of peers tracked by Bloomberg this year, said in an interview in Hong Kong. “A lot of people were concerned because of the number of new issues coming in the US market. I think that’s probably coming to an end now.”
http://www.todayonline.com/business/tenc...rns-deepen

[Tiggerbee]

It catches my attention due to a name, Mr Mark Mobius...

(not vested)

Tencent extends Internet stock rout as valuation concerns deepen

HONG KONG – Tencent Holdings slumped to a two-month low and a gauge of Asian Internet companies erased its advance for the year amid growing concern that valuations overshot earnings prospects, the Bloomberg news agency reported.

Tencent tumbled 4.5 per cent to HK$501.50 at the close in Hong Kong, paring its gain during the past five years to 698 per cent. The Bloomberg Asia Pacific Internet Index slid 3.8 per cent, extending its decline from a March 6 high to 15 per cent and its lowest level since Dec 26. SoftBank Corp, which owns a stake in Alibaba Group Holding, sank 4.6 per cent in Tokyo. Naver Corp declined 6.5 per cent in Seoul.

The losses in Asia follow the Nasdaq Composite Index’s biggest retreat in two months on April 4, as investors pare holdings in Internet companies that have led gains in global equities during the past 12 months. The retreat may weigh on investor demand for initial public offerings as Weibo, China’s biggest microblogging outlet, and Alibaba, the nation’s largest e-commerce business, prepare to sell shares in the U.S.

Mr Mark Mobius, who oversees about US$50 billion at Templeton Emerging Markets Group, said he is buying technology stocks after the retreat sent valuations to “reasonable” levels.

“If you look at Tencent for example, it’s come down about 20 per cent and that’s a pretty good correction,” Mr Mobius, whose Templeton Asian Growth Fund has outperformed 88 per cent of peers tracked by Bloomberg this year, said in an interview in Hong Kong. “A lot of people were concerned because of the number of new issues coming in the US market. I think that’s probably coming to an end now.”
http://www.todayonline.com/business/tenc...rns-deepen

Did Tencent initiate the share buy back on Mobius' comments? Heh..

(Vested)

[yawnyawn]

It catches my attention due to a name, Mr Mark Mobius...

(not vested)

Tencent extends Internet stock rout as valuation concerns deepen

HONG KONG – Tencent Holdings slumped to a two-month low and a gauge of Asian Internet companies erased its advance for the year amid growing concern that valuations overshot earnings prospects, the Bloomberg news agency reported.

Tencent tumbled 4.5 per cent to HK$501.50 at the close in Hong Kong, paring its gain during the past five years to 698 per cent. The Bloomberg Asia Pacific Internet Index slid 3.8 per cent, extending its decline from a March 6 high to 15 per cent and its lowest level since Dec 26. SoftBank Corp, which owns a stake in Alibaba Group Holding, sank 4.6 per cent in Tokyo. Naver Corp declined 6.5 per cent in Seoul.

The losses in Asia follow the Nasdaq Composite Index’s biggest retreat in two months on April 4, as investors pare holdings in Internet companies that have led gains in global equities during the past 12 months. The retreat may weigh on investor demand for initial public offerings as Weibo, China’s biggest microblogging outlet, and Alibaba, the nation’s largest e-commerce business, prepare to sell shares in the U.S.

Mr Mark Mobius, who oversees about US$50 billion at Templeton Emerging Markets Group, said he is buying technology stocks after the retreat sent valuations to “reasonable” levels.

“If you look at Tencent for example, it’s come down about 20 per cent and that’s a pretty good correction,” Mr Mobius, whose Templeton Asian Growth Fund has outperformed 88 per cent of peers tracked by Bloomberg this year, said in an interview in Hong Kong. “A lot of people were concerned because of the number of new issues coming in the US market. I think that’s probably coming to an end now.”
http://www.todayonline.com/business/tenc...rns-deepen

Did Tencent initiate the share buy back on Mobius' comments? Heh..

(Vested)

Only 153,000 shares were bought back by Tencent yesterday, roughly HKD76m. It is a relatively small amount considering their Hkd 960b market cap.

http://www.aastocks.com/tc/ltp/LTP_RT_Qu...99391.html

(Not vested yet)

[yawnyawn]

Tencent Launches $5 Billion Bond Program Amid Acquisition Spree

Chinese Internet company Tencent Holdings Ltd. TCEHY +2.78% said Thursday it has set up a program that enables it to issue bonds worth up to $5 billion over the next year, at a time when it has been going on an acquisition binge to compete with rival Alibaba Group Holdings Ltd.

While it is unclear when and how much debt that Tencent might issue, the program gives it the capacity and flexibility to raise more funds. In China's vast Internet sector, the battle for supremacy between Tencent and Alibaba is intensifying as both companies spend more to launch new services or buy other domestic businesses. Tencent, whose main businesses are online games and social networks, and Alibaba, which runs China's most popular shopping sites, are both broadening their operations through alliances and acquisitions.

Tencent said in a statement that the proceeds from any bonds issued out of the program—known as a medium-term note program—will be used for "general corporate purposes," without giving details. Tencent said it has hired Deutsche Bank DBK.XE -0.99% to set up the program.

Tencent will start a roadshow in the U.S. next week, where Chief Strategy Officer James Mitchell and Chief Financial Officer John Lo will meet investors from New York, Boston and Los Angeles, a person familiar with the matter said, adding that Deustche Bank, Barclays and J.P. Morgan Chase & Co. are arranging the roadshow.

Over the past seven months, the company has struck several deals worth over $1 billion in total. In March alone, the company announced three deals: a $215 million agreement to buy a 15% stake in Chinese e-commerce company JD.com., a $180 million deal to buy 15% of online real-estate-services firm Leju Holdings Ltd., and a $500 million deal to buy 28% of Korean mobile games firm CJ Games Corp.

Alibaba, meanwhile, has also been on a buying spree. Since the start of last year, the company has spent more than $3.5 billion on seven acquisitions, including AutoNavi Holdings Ltd. AMAP -1.47% , an online mapmaker, and a minority stake in Sina Corp.'s SINA -6.46% Twitter TWTR -2.71% -like Weibo microblog business. In May 2013, Alibaba raised $8 billion in a syndicated bank loan. While it used part of that loan to refinance its existing debt, the remaining portion has helped it finance its expansion.

Tencent issued its first U.S. dollar bond worth $600 million in December 2011, issued another $600 million bond in August 2012 and a $300 million bond in August last year



In 2011 - Tencent had issued LTN of USD600 million for general corporate purposes with interest at 4.625% per annum. maturity on 12 December 2016.

2012 - LTN of USD600 million for general corporate purposes. The 2012 Notes bear an interest at 3.375% per annum maturing on 5 March 2018.

2013 - LTN of USD300 million for general corporate purposes. The 2013 Notes bear an interest at 1.860% per annum, maturing on 10 September 2015.

Latest B/S shows gross debt position of CNY15.1b vs an equity position of CNY58.5b which is fairly conservative. Total cash & term deposit balance of CNY51b ~ USD8.2b (CNY20b cash and CNY31b term deposits) Using its FCF of CNY19.6b ~USD3.2b in FY2013 and its USD8.2b cash & cash equivalent, the company can easily fund its own expansion without issuing more debt!

[yawnyawn]

Internet bank? Getting harder to value Tencent now due to so many new businesses and m&a. It is like a conglomerate.

http://www.wantchinatimes.com/news-subcl...9&cid=1206

Tencent starts recruiting for the establishment of a private bank
Staff Reporter 2014-04-14 17:14 (GMT+8)

Tencent Holdings, a Chinese investment holding company, has been recruiting executives for the establishment of its private bank, which recently received a green light from Chinese regulators.

The China Banking Regulatory Commission's (CBRC) chairman Shang Fulin said on March 11 that the commission had picked 10 private firms to participate in the first pilot program for the establishment of five banks. Tencent and Baiyeyuan were two on the list.

Chen Ying, an official at the Development of the Shenzhen Municipal Government Financial Services Office, explained that Tencent positioned its bank as an internet banking-based outfit during its initial proposal. Its pitch landed in on the first shortlist of private banks to be established under the pilot program.

Tencent has been preparing for the business for several years, Chen added.

Chen further said that private capital had not been allowed to enter the financial sector before the pilot program. The Shenzhen government has been hoping to facilitate some innovative financial projects in places such as Qianhai and build pilot private banks under the government's plan.

"When we first began planning for Qianhai, we were thinking about submitting some workable plans and projects, in collaboration with financial regulators, to the CBRC, the China Securities Regulatory Commission and China Insurance Regulatory Commission," Chen stated, adding that ideas about opening a technology bank and an internet bank were part of the proposal.

But she further pointed out that a technology bank did not comply with banking laws, so Shenzhen could only continue facilitating pilot projects for internet banks.

Chen revealed that Tencent is the first private firm to propose a plan for an internet bank.

It was reported that Tencent and Baiyeyuan had proposed to jointly set up a private bank, officially named the Qianhai Bank, and that the scale of the new bank has yet to be confirmed. Tencent would be a major shareholder in this bank.

According to policies followed in Shenzhen, shareholders in private-invested banks could determine the direction for the bank's development on their own after acquiring a license and without government intervention.