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China tells Alibaba, Tencent to open platforms up to each other - media
By: Reuters | September 11, 2021
SHANGHAI (Reuters) - China's industry ministry has told technology companies including Alibaba (NYSE:BABA) Group Ltd and Tencent Holdings (OTC:TCEHY) Ltd to stop blocking each other's website links from their platforms, the 21st Century Business Herald said Saturday.
The newspaper, citing unnamed sources, said the Ministry of Industry and Information Technology proposed standards to companies on Friday for instant messaging services, telling them all platforms must be unblocked by a certain time.
The ministry said it may have to resort to other measures if the firms did not comply, the newspaper said.
The move is the latest in a regulatory crackdown spanning industries from tech to entertainment and gaming companies.
Companies that attended the meeting included Alibaba, Tencent, ByteDance, Baidu Inc (NASDAQ:BIDU), Huawei Technologies Co and Xiaomi (OTC:XIACF) Corp, the newspaper said. The companies did not immediately respond to requests for comment.
China's internet is dominated by a handful of technology giants who have historically blocked links and services by rivals on their platforms, creating what analysts have described as "walled gardens".
Regulators in recent months have cracked down, accusing companies of building monopolies and restricting consumers' choices.
In July, the Wall Street Journal reported that Alibaba and Tencent were gradually considering opening up their services to each other, such as by introducing Tencent's WeChat Pay to Alibaba's Taobao and Tmall e-commerce marketplaces.
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Where Fundamentals Meet Technicals: TCEHY
By: Lyn Alden Schwartzer | September 1, 2021
This issue of “Where Fundamentals Meet Technicals” looks at two growth stocks and one commodity stock.
Tencent: Decision Time
Tencent (TCEHY) is a diversified corporation that operates China’s biggest social networks, one of the two main Chinese payment platforms, and a global gaming business. They hold stakes in companies like JD (JD) and Sea Ltd (SE), as well as many other companies around the world.
And like most Chinese companies, especially tech/media companies, their stock has been utterly destroyed by a major government crackdown on the industry, along with a downturn in China’s credit cycle. Sentiment on China is about as bad as it gets.
In terms of valuation, the stock bounced off the all-time low valuation level that it reached a few years ago when the Chinese government stopped approving its games for a year:
The F.A.S.T. Graph shows either 1) analysts are wrong about their earnings forecasts, or 2) the stock is undervalued:
Garrett’s chart shows a potential bottom in place, and writes, “breaking above the Aug high would be the first indication of a near-term trend change since the C-wave down started.”
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Shorting this pos....Ccp going inward going to cut 75% of value of China virus companies....This has a 6 count on the ELLIOTT WAVE anyway...A B C DOWNTREND NOW
Tencent shares fall more than 2% after China tightens rules for young video gamers
By: Reuters | August 30, 2021
Shares of Tencent Holdings (OTC:TCEHY) Ltd dropped more than 2% on Tuesday, after China announced new rules for young video gamers.
That compared to a 0.4% slide in the benchmark Hang Seng Index and a 0.6% gain in Hang Seng Tech Index.
China announced on Monday rules forbidding under-18s from playing video games for more than three hours a week, a stringent social intervention that it said was needed to pull the plug on a growing addiction to what it once described as "spiritual opium".
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7 Cheap Chinese Stocks to Buy Now
By: MarketBeat | August 28, 2021
• Tencent Holdings (OTC: TCEHY) - Before buying Tencent Holdings, investors need to ask themselves which narrative they believe. Has the stock seen its best days now that it has declined by 25 percent since hitting its high in March? Or is that recent decline just a bump in the road for a stock that has nearly doubled in two years and, according to at least one portfolio manager, is a company that “is capable of growing 30% annually for a long period of time.”?
Tencent, the first Chinese company to have a valuation of over $500 billion, is largely unknown in the United States, but that seems about to change. This is largely due to Tencent’s WeChat social media platform that has the size of U.S. social media giants Facebook and Twitter (it went over 1 billion users in March), but has a broader scope that allows them to reach the consumer at many touch points, making the platform very appealing for advertisers. In addition to traditional social media, WeChat embraces mobile payments, streaming content, cloud-based computing, and recently online gaming. And that’s where the question may be answered. Although the government in Beijing has put a moratorium on approving new games (not just for Tencent, but for any provider), the size of the Chinese digital gaming community will make it impossible for that freeze to stay in place much longer.
Skeptics will point to Tencent’s valuation which, as measured by their P/E ratio, is 37 – not too far off their high of 40. There is also a growing sell sentiment regarding China stocks in general, and the liquidity of Tencent feeds into that. Still, if you’re looking for a stock that is capturing the minds, and wallets, of where the real growth is happening in China, it would seem Tencent’s best days are still to come.
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Tencent limits how long kids can play its flagship game, 'Honor of Kings'
By: Engadget | August 4, 2021
• Those aged under 18 can only play for one hour during weekdays.
China's regulatory war against its tech giants isn't limited to data. After opening a front in gaming back in 2018, the government is now adding to the restraints the biggest publishers face. Tencent is first on the chopping block. The publisher has been forced to further slash playing time on Honor of Kings for those aged under 18 to one hour during regular days and two hours on weekends. The rules, designed to appease the country's all-powerful censors, come into effect today, according to state media outlet the South China Morning Post.
Previously, play time in China was capped at 90 minutes per day during the week and three hours per day at weekends and holidays as part of broader rules introduced in 2019. Additional restrictions banned younger gamers from playing between 10 p.m. and 8 a.m. and curbed how much they could spend on downloadable content.
Honor of Kings is a hugely popular multiplayer online battle arena game developed by Tencent subsidiary TiMi Studio Group, also known for Call of Duty: Mobile and Pokémon Unite. As of November, the mobile title boasted 100 million players. But, its success has also brought with it increased scrutiny. In June, Tencent found itself at the center of a lawsuit that accused it of including "inappropriate" content in Honor of Kings, including characters with low-cut clothes and historical inaccuracies.
The latest crackdown comes amid growing fears in China over the addictive nature of video games. On Tuesday, a state-affiliated media outlet described the products produced by the gaming industry as “spiritual opium.” The article continued: “No industry or sport should develop at the price of destroying a generation.”
Therein lies the broader issue. China is currently grappling with a generational divide that has seen younger citizens reject the competitive lifestyle pressures heaped upon them. This stance is encapsulated by the "tang ping," or "lying flat," philosophy embraced by a growing number of Gen Z Chinese. In a nutshell, it signifies those who choose not to work hard, not to buy property and not to marry and have children.
Instead of addressing the societal complaints, China is choosing to deflect the blame onto the gaming industry.
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Tencent vows fresh gaming curbs after 'spiritual opium' attack zaps $60 billion
By: Brenda Goh and Samuel Shen | August 3, 2021
SHANGHAI (Reuters) -China's Tencent Holdings (OTC:TCEHY) Ltd said on Tuesday it would further curb minors' access to its flagship video game, hours after its shares were battered by a state media article that described online games as "spiritual opium".
Economic Information Daily cited Tencent's "Honor of Kings" in an article in which it said minors were addicted to online games and called for more curbs on the industry. The outlet is affiliated with China's biggest state run news agency, Xinhua.
The broadside re-ignited investor fears about state intervention in China after Beijing had already targeted the property, education and technology sectors to curb cost pressures and reassert the primacy of socialism after years of runaway market growth.
"They don’t believe anything is off limit and will react, sometimes overreact, to anything on state media that fits the tech crackdown narrative,” Ether Yin, partner at Trivium, a Beijing-based consultancy.
China's largest social media and video game firm saw its stock tumble more than 10% in early trade, wiping almost $60 billion from its market capitalisation.
The stock was on track to fall the most in a decade before trimming losses after the article vanished from the outlet's website and WeChat account on Tuesday afternoon. The article later reappeared later in the day with the historically loaded term "spiritual opium" removed and other sections edited. The CSI300 index last week fell more than 5% for its biggest monthly loss since October 2018.
In the original article, the newspaper had singled out "Honor of Kings" as the most popular online game among students who, it said, played for up to eight hours a day.
"'Spiritual opium' has grown into an industry worth hundreds of billions," the newspaper said.
"....No industry, no sport, can be allowed to develop in a way that will destroy a generation."
Opium is a sensitive subject in China which ceded Hong Kong island to Britain "in perpetuity" in 1842 at the end of the First Opium War, fought over Britain's export of the drug to China where addiction became widespread.
Tencent in a statement said it will introduce more measures to reduce minors' time and money spent on games, starting with "Honor of Kings". It also called for an industry ban on gaming for children under 12 years old.
The company did not address the article in its statement, nor did it respond to a Reuters request for comment.
The article also hit rivals' shares. NetEase (NASDAQ:NTES) Inc dropped more than 15% before paring losses to sit around 8% lower in late afternoon trade. Game developer XD Inc fell 8.2% and mobile gaming company GMGE Technology Group Ltd dropped 15.6%.
Outside of gaming, investors were also caught off guard by the State Administration For Market Regulation (SAMR) on Tuesday saying it would investigate auto chip distributors and punish any hoarding, collusion and price-gouging. The semiconductor stock index subsequently fell more than 6%.
CHILD WELLBEING
The reposted Economic Information Daily article, in a shift of tone, said that authorities, game developers and families had to work together to combat child addiction to online video games, and parents had to be responsible for supervision.
Chinese regulators have since 2017 sought to limit the amount of time minors spend playing video games and companies including Tencent already have anti-addiction systems that they say cap young users' game time.
But authorities have in recent months placed fresh focus on protecting child wellbeing, and said they want to further strengthen rules around online gaming and education. Last month, they banned for-profit tutoring in core school subjects, attacking China's $120 billion private tutoring sector.
That added to other regulatory action in the technology industry, including a ban on Tencent from exclusive music copyright agreements and a fine for unfair market practices.
At one point on Tuesday, Tencent was briefly de-throned as Asia's most-valuable firm by market capitalisation by chipmaker Taiwan Semiconductor Manufacturing Co Ltd.
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Tencent Is World’s Worst Stock Bet With $170 Billion Wipeout
By: Bloomberg News | July 28, 2021
(Bloomberg) -- China’s unprecedented crackdown on its technology industry has turned Tencent Holdings Ltd. from a market darling into the world’s biggest stock loser this month.
The Chinese Internet giant had tumbled 23% in July as of Wednesday, set for its worst month ever after erasing about $170 billion of market value. That marks the fastest evaporation of shareholder wealth worldwide during this period, Bloomberg data shows. Nine of the top 10 losers in shareholder value this month are Chinese companies, including Meituan and Alibaba Group Holding Ltd.
Tencent’s shares rebounded by 7.1% on Thursday morning, tracking broader gains in Chinese stocks after Beijing intensified efforts to alleviate concerns about its crackdown on the private education industry.
The Shenzhen-based firm is one of the key casualties of an official campaign that targets some of the nation’s tech behemoths considered posing a potential threat to China’s data security and financial stability. The selloff in its shares intensified earlier this week after Beijing broadened the regulatory clampdown to include other once high-flying industries such as private education.
“I don’t see an end to the regulatory crackdown. Data security is a top priority to policy makers in the coming years. It’s a new normal,” said Paul Pong, managing director at Pegasus Fund Managers Ltd. “Valuations will have to be adjusted to cope with that, especially for technology giants like Tencent.”
The regulatory storm has resulted in penalties such as the loss of exclusive music streaming rights and anti-trust fines for Tencent. This week, the company said it was also suspending new user registration for its popular WeChat services and was ordered to fix mobile app-related issues.
Despite concerns about further punitive measures from regulators, the company’s stock is starting to look cheap and most analysts have refrained from cutting their price targets: Among the 68 analysts who have a rating on Tencent, 62 still recommend the stock as a “buy.” The average target price among analysts is HK$736.3, representing a 65% premium over Wednesday’s close of HK$447.2, Bloomberg data shows.
At HK$447.2, the stock was trading at 22.5 times forward earnings, well below its historical average of 30 times. It also has fallen to the most oversold level in more than six years.
“Tencent trading below HK$500 is attractive, but the upcoming earnings will be a key thing to watch,” said Pong, adding that if the firm can achieve 20%-30% growth, its shares could enjoy a solid rebound. “Because that would show they can still maintain good profitability in this tough environment.”
To Citigroup analysts including Alicia Yap, any substantial share buyback by the company could also help reverse currently poor investor mood.
“We believe if major Internet companies announce new share buyback programs or increase size of existing buybacks, it would demonstrate the management’s confidence in fundamentals and reassure investors on profit growth outlook,” Yap and her colleagues wrote in a research note. Yap has a ‘buy’ rating on the stock.
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China regulator bars Tencent from exclusive rights in online music
By: Reuters | July 24, 2021
SHANGHAI (Reuters) - China's market regulator on Saturday said it would bar Tencent Holdings (OTC:TCEHY) Ltd from exclusive music copyright agreements and fined the company for unfair market practices in the online music market after its acquisition of China Music Corporation.
The Chinese government has been stepping up antitrust actions in recent months against the country's large tech companies, including a record $2.75 billion fine on e-commerce giant Alibaba (NYSE:BABA) for engaging in anti-competitive behaviour.
Tencent and Tencent Music Entertainment Group (NYSE:TME), the unit created from the acquisition, said they would abide by the decision and comply with all regulatory requirements.
The State Administration Of Market Regulation (SAMR) said it had investigated Tencent's activities in the online music broadcasting platform market in China, in which music copyright is the core asset, in a notice posted on its official website.
Reuters reported in mid-July that the antitrust regulator would order Tencent's music streaming arm to give up exclusive rights to music labels that it has used to compete with smaller rivals, citing people with knowledge of the matter.
Tencent held more than 80% of exclusive music library resources after its acquisitions, the regulator said, increasing its leverage over upstream copyright parties and allowing it to restrict new entrants, the regulator said.
SAMR said Tencent and its affiliated companies must not engage in exclusive copyright agreements with upstream owners of such rights, while existing agreements must be terminated within 30 days of the regulatory notice.
The regulator also ordered Tencent to pay a fine of 500,000 yuan ($77,150).
Earlier this month, the regulator said it would block Tencent's plan to merge the country's top two videogame streaming sites, Huya (NYSE:HUYA) and DouYu , on antitrust grounds.
($1 = 6.4808 Chinese yuan renminbi)
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Tencent to buy British video game studio Sumo for $1.27 billion
By: Engadget | July 19, 2021
• The developer's output includes 'LittleBigPlanet 3' and its spinoff 'Sackboy.'
In a busy year for gaming mergers, another deal has just been announced. Tencent is to fully acquire Sumo Group, the UK developer behind LittleBigPlanet 3 and Crackdown 3. The Chinese web giant is offering 513 pence per share for the studio, in which it already owns an 8.75 percent stake, valuing it at $1.26 billion (£990 million).
The acquisition brings another major developer into the Tencent fold. Already the world's biggest gaming company, Tencent owns League of Legends studio Riot Games, and has a financial stake in several publishers including Epic Games, Activision Blizzard, Ubisoft, Bluehole, Paradox Interactive, Supercell, Grinding Gear Games and Yager, along with chat platform Discord. In February, the company acquired a minority position in DayZ developer Bohemia Interactive.
But, Tencent's dominance has triggered regulatory pushback at home and abroad. Earlier this month, Chinese authorities blocked its plan to merge its two game livestreaming sites, Douyu and Huya. Tencent is also negiotiating an agreement with a US national security panel that would allow it to retain its stakes in US companies Riot Games and Epic Games, according to multiple reports.
The Sumo acquisition hands Tencent a mix of AAA and indie content. Alongside LittleBigPlanet 3 and spinoff Sackboy, both published by Sony, Sumo was also behind Hitman 2. It also owns UK-based indie developer The Chinese Room (Everybody's Gone to the Rapture) and Red Kite Games, best known for ports of games like Two Point Hospital. In February, the studio purchased Poland's PixelAnt Games for £250,000.
“The business will benefit from Tencent’s broad videogaming ecosystem, proven industry expertise and its strategic resources, which will help secure and further the aspirations and long-term success of Sumo,” Ian Livingstone, non-executive chairman of Sumo, said in a statement.
Between Microsoft's acquisition of ZeniMax and EA's deal for Codemasters, 2021 is already turning out to be a blockbuster year for video game consolidation. Other hot deals include Epic Games acquisition of Fall Guys studio Mediatonic, Sony's purchase of Returnal developer Housmarque and Facebook's takeover of BigBox VR through its Oculus arm.
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Alibaba, Tencent mull over opening up services to each other - WSJ
By: Reuters | July 14, 2021
• July 14 (Reuters) - China's two online giants Alibaba Group Holding Ltd and Tencent Holdings Ltd are gradually considering opening up their services to each other, according to a Wall Street Journal report on Wednesday.
It comes days after China's crackdown on a number of technology companies with overseas listings including Didi Chuxing, Tencent and Alibaba.
Both Alibaba and Tencent are working on new plans separately to loosen up restrictions including introducing Tencent's WeChat Pay to Alibaba's e-commerce marketplaces, Taobao and Tmall, the WSJ report added, citing people familiar with the matter.
Alibaba did not immediately respond to a request for comment while Tencent could not be immediately reached. (Reporting by Tiyashi Datta in Bengaluru; Editing by Rashmi Aich)
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Chinese antitrust regulator blocks Tencent's $5.3 billion video games merger
By: Reuters | July 10, 2021
HONG KONG (Reuters) -China's market regulator on Saturday said it would block Tencent Holdings (OTC:TCEHY) Ltd's plan to merge the country's top two videogame streaming sites, Huya (NYSE:HUYA) and DouYu, on antitrust grounds.
Tencent first announced plans to merge Huya and DouYu last year in a tie-up designed to streamline its stakes in the firms, which were estimated by data firm MobTech to have an 80% slice of a market worth more than $3 billion and growing fast.
Tencent is Huya's biggest shareholder with 36.9% and also owns over a third of DouYu, with both firms listed in the United States, and worth a combined $5.3 billion in market value.
Reuters first reported the State Administration of Market Regulation (SAMR) plan to block the deal on Monday, which came after the regulator reviewed additional concessions proposed by Tencent for the merger.
SAMR said Huya and DouYu's combined market share in the video game live streaming industry would be over 70% and their merger would strengthen Tencent's dominance in this market, given Tencent already has over 40% market share in the online games operations segment.
Huya and DouYu are ranked No. 1 and No. 2, respectively, as China's most popular video game streaming sites, where users flock to watch e-sports tournaments and follow professional gamers.
Tencent said in a statement it "will abide by the decision, comply with all regulatory requirements, operate in accordance with applicable laws and regulations, and fulfill our social responsibilities."
The deal termination comes amid an ongoing crackdown on Chinese tech companies from the government. Earlier this year, the anti-monopoly regulator placed a record $2.75 billion fine on e-commerce giant Alibaba (NYSE:BABA) for engaging in anti-competitive behaviour.
DouYu said it "fully respects the regulatory decision and actively cooperates with regulatory requirements to operate in compliance with applicable laws and regulations."
Huya did not immediately respond to a request for comment.
In a memo from SAMR published concurrently with the announcement, Zhang Chenying, a member of the state council's anti-trust committee, argued the deal would prevent fair competition.
"If Huya and DouYu are to merge, the original joint control of Douyu will become Tencent's complete control of a merged entity," Zhang wrote.
"Considering factors such as revenue, active users, livestreaming resources and other key indices, we can expect that a merger would eliminate or restrict fair competition."
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Chinese activists sue Tencent over 'inappropriate' content in 'Honor of Kings'
By: Engadget | June 1, 2021
• A public interest group said the game, also known as 'Arena of Valor,' has elements that are unsuitable for kids.
Tencent has been sued over allegedly "inappropriate" content in the massively successful mobile game Honor of Kings. Beijing Teenagers Law Aid And Research Center claims the game, which is known as Arena of Valor in the West, includes content that isn't suitable for children.
The public interest group says it filed the lawsuit on Tuesday after an amended protection of minors law came into force. It contends that Tencent has lowered the recommended minimum age limit from 18 to 12 over the last few years.
The group claims Honor of Kings has characters with low-cut clothes, narrative elements that "tampered with historical figures" and "a lack of respect for traditional culture," according to Reuters. It also wrote in a social media post that the game's website and forums host "a lot of ... low-taste content that is inappropriate for teenagers" and that a raffle system could prompt young players to play the game for longer than they might otherwise.
Honor of Kings had 100 million daily active players worldwide as of November, Tencent said at the time. The company is the subject of other lawsuits, including one from TikTok owner ByteDance, which accused Tencent of violating antitrust laws by preventing users from accessing Douyin content on the WeChat and QQ messaging apps.
Reports in April suggested that China plans to fine Tencent amid an antitrust crackdown. The company may face a penalty of around $1.5 billion. Tencent has faced issues in some other areas. It lost publishing rights to PUBG Mobile Lite and PUBG Mobile Nordic Map in India last year after the country banned more than 100 apps with links to China.
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Tencent's Margins Are Going Down, and That's Great News for Shareholders
By: Motley Fool | May 23, 2021
• Tencent is investing more of its profits this year into big growth opportunities.
Shares of Chinese internet giant Tencent (OTC:TCEHY) traded down after it reported its first-quarter numbers last week. Although results were strong, with revenue up 25% and net profit up 22% by non-International Financial Reporting Standards, investors wary of China's recent anti-monopoly crackdown probably needed a bigger beat to assuage those fears.
In addition, Tencent's management forecast heavy stepped-up spending this year, which means the company's margins will edge down and profit growth will be somewhere between zero and that 22% seen last quarter, according to management.
However, instead of fearing this scenario for the highly profitable Tencent, shareholders should be celebrating the news.
New opportunities lead to more investment
Tencent has the world's largest video game empire, its 1.242 billion-user WeChat social media platform is the largest in China, and it's also the owner of the largest Chinese video and music streaming platforms. Tencent is also one of the two major digital-payment and cloud platforms in the country, neck-and-neck with Alibaba (NYSE: BABA). It's already so large, that some may think it may be hard to keep up top-line growth.
However, that view may be short-sighted. China's rising middle class creates a formidable tailwind, and Tencent's deliberate approach to monetization has allowed it to keep up consistent strong growth for a sustained period...
* * *
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Tencent's Timi will make new games with Xbox Game Studios
By: Engadget | May 13, 2021
• The partnership could produce a mobile spinoff of an Xbox franchise.
Two of the biggest names in gaming are joining forces. Tencent subsidiary Timi and Xbox Game Studios have struck a "strategic partnership" that will see them jointly create new games, the companies said in an announcement today. Details of the venture are sparse, but it wouldn't be surprising if it it involved a mobile spin on an Xbox franchise.
China's Timi — which reportedly became the world's largest developer last year — is known for its work on mobile games including the upcoming Pokémon Unite (which is also slated for the Nintendo Switch), Call of Duty: Mobile and its ports of multiplayer online battle arena titles Honor Of Kings and Arena Of Valor.
Microsoft's Xbox Game Studios, meanwhile, owns a war chest of popular game series through its enviable roster of subsidiaries. Its recent $7.5 billion acquisition of Bethesda parent ZeniMax brought the total number of first-party studios under its umbrella to 23. While its eye-watering output includes franchises such as Halo, Minecraft, Fallout, Forza, and Wolfenstein, to name a few. So, the East-meets-West combination should be an exciting prospect for gamers worldwide.
Tencent is no stranger to foreign partnerships, either. The company's deal to distribute the Nintendo Switch in its native China has proven lucrative for both parties, with the console outselling the PS4 and Xbox One. Microsoft will be hoping the Timi partnership can help it to replicate some of that success.
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China’s Tencent in Talks with U.S. to Keep Gaming Investments
By: Echo Wang and Greg Roumeliotis | May 6, 2021
• (Reuters) – Tencent Holdings Ltd is negotiating agreements with a U.S. national security panel that would allow it to keep its ownership stakes in U.S. video game developers Riot Games and Epic Games, according to people familiar with the matter.
Tencent has been in talks with the Committee on Foreign Investment in the United States (CFIUS), which has the authority to order the Chinese technology giant to divest U.S. holdings, since the second half of last year, the sources said.
CFIUS has been looking in to whether Epic Games’ and Riot Games’ handling of the personal data of their users constitutes a national security risk because of their Chinese ownership, the sources added.
Tencent owns a 40% stake in Epic Games, the maker of popular video game Fortnite. Tencent also bought a majority stake in Riot Games in 2011 and acquired the rest of the company in 2015. Riot Games is the developer of “League of Legends,” one of the world’s most popular desktop-based games.
Tencent is negotiating risk-mitigation measures with CFIUS so it can keep its investments, according to the sources. The details of the proposed measures could not be learned. They typically involve ringfencing the owner of a company from operations that have national security implications. They often call for the appointment of independent auditors to monitor the implementation of these agreements.
One of the sources said Epic Games has not been sharing any user data with Tencent.
The sources cautioned there is no certainty that Tencent will clinch deals to keep its investments and asked not to be identified because the matter is confidential.
Tencent, Epic Games and a CFIUS representative at the U.S. Treasury Department declined to comment.
A Riot Games spokesman said the Los Angeles-based company operates independently of Tencent and that it has implemented “industry-leading practices” to protect player data. He declined to comment on Riot Games’ discussions with CFIUS.
CFIUS has been cracking down on Chinese ownership of U.S. technology assets in the last few years, amid an escalation in tensions between Washington and Beijing over trade, human rights and the protection of intellectual property. U.S. officials have expressed concerns that the personal data of U.S. citizens could end up in the hands of China’s Communist Party government.
President Joe Biden’s administration has maintained the hawkish stance against China inherited in January from his predecessor Donald Trump, albeit with more of a focus on geopolitical issues such as the future of Taiwan and Hong Kong, as well as China’s persecution of the Uyghurs in Xinjiang.
Yet many key CFIUS roles have not yet been staffed. This has provided a reprieve to China’s ByteDance, which was ordered by Trump last year to sell its popular short video app TikTok but balked at a transaction that would have involved Oracle Corp and Walmart Inc. CFIUS has not sought to enforce the divestiture order under Biden.
Epic is locked in a legal fight with Apple Inc over access to the iPhone maker’s app store. It alleges that Apple forces developers to use its in-app payment systems – which charge commissions of up to 30% – and to submit to app-review guidelines that discriminate against products that compete with Apple’s own.
Apple argues that Epic Games broke their contract when it introduced its own in-app payment system in Fortnite to circumvent Apple’s commissions. It says the way it runs the app store inspires trust in consumers to open up their wallets to unknown developers.
Tencent’s vast businesses include video games, content streaming, social media, advertising and cloud services. China has in recent months sought to curb the economic and social power of Tencent and other internet companies such as Alibaba Group Holding Ltd, in a clampdown backed by President Xi Jinping. Reuters reported last week that Beijing was preparing a substantial antitrust fine for Tencent.
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Biggest of them all and growing. In 2yrs we’re looking at 150-160 ps
Tencent (TCEHY) Upgraded by Zacks Investment Research to Buy
By: MarketBeat | April 13, 2021
• Tencent (OTCMKTS:TCEHY) was upgraded by Zacks Investment Research from a "hold" rating to a "buy" rating in a research note issued to investors on Tuesday, Zacks.com reports. The firm currently has a $89.00 price objective on the technology company's stock. Zacks Investment Research's price objective indicates a potential upside of 12.30% from the stock's current price.
According to Zacks, "Tencent Holdings Limited is an Internet service portal. Tencent provides value-added Internet, mobile and telecom services and online advertising. Tencent's leading Internet platforms in China are QQ Instant Messenger, QQ.com, QQ Games, Qzone, 3g.QQ.com, SoSo, PaiPai and Tenpay. It has brought together China's largest Internet community, to meet the various needs of Internet users including communication, information, entertainment, e-commerce and others. Tencent Holdings Limited is headquartered in Shenzhen, the People's Republic of China. "
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Tencent Slips After Prosus Reveals Plan To Cut 2% Stake
By: Dhirendra Tripathi | April 7, 2021
Investing.com – Shares of Tencent Holdings (OTC:TCEHY) slumped in Wednesday’s premarket following a disclosure by Prosus (OTC:PROSF) that it will cut its stake in the Chinese tech giant to 28.9% from 30.9%.
Based on Tencent's closing price on Wednesday, the share sale would have been worth $15.53 billion but given the near 9% fall today, the eventual proceeds could clearly be less.
The Dutch conglomerate, a subsidiary of South Africa's Naspers, said it intends to sell up to 191.9 million shares in Tencent to global institutional investors. Naspers was one of the earliest investors in Tencent.
“The proceeds of the sale will increase our financial flexibility, enabling us to invest in the significant growth potential we see across the group, as well as in our own stock,” CEO Bob van Dijk said in a statement.
Prosus said it was committed to not reducing its stake further for three years.
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Alibaba, Tencent, Baidu Down as Much as 3% in Premarket After China Fines
By: Dhirendra Tripathi | March 12, 2021
Investing.com – The ADRs of some of China's biggest companies were hit on Friday by a fine in their home country, pushing them down by as much as 3% in premarket trading.
Overnight, the Chinese markets regulator penalized 12 companies for violating anti-monopoly rules, in what was interpreted by some as a shot across the bows of companies whose financial clout is reportedly seen as a threat by some in Beijing.
Those getting the stick include Alibaba Group (NYSE:BABA), Baidu (NASDAQ:BIDU), Tencent (OTC:TCEHY), ride-hailing company Didi Chuxing and a ByteDance-backed firm. Alibaba Group ADRs were down 2.4%, Baidu 2.7% and Tencent Music down 3.0%. Tencent Holdings' stock in Hong Kong had finished down 4.4% but was yet to trade in premarket.
Quoting the State Administration for Market Regulation (SAMR), Reuters said the companies were fined 500,000 yuan ($77,000) each for behavior that caused market concentration but did not exclude all competition from other companies.
The fines were small, relative to the size of the companies involved. As such, markets were spooked more by the signal that Beijing was sending. The move comes only a couple of months after regulators wrecked plans for Jack Ma's Ant Group to go public with fresh regulations that cracked down on some of its most lucrative financial services.
Tencent said in a statement it would actively rectify operations and provide the regulator with timely reports on deals in future.
China has stepped up scrutiny of its internet giants in recent months, citing concerns over monopolistic behaviour and potential infringement of consumer rights.
The regulator has fined Alibaba (NYSE:BABA), Tencent-backed China Literature and other firms for not reporting deals properly for anti-trust reviews.
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Tencent boss to call for tighter governance on China's internet economy: state media
By: Reuters | March 3, 2021
The founder and CEO of technology giant Tencent Holdings (OTC:TCEHY) plans to call for tighter governance of the internet economy at China's parliamentary meeting in Beijing, state broadcaster China National Radio (CNR) said on Wednesday.
Pony Ma will make the proposal at the National People's Congress (NPC), which starts on Friday, the report said. Hundreds of proposals are likely to be submitted at the annual gathering, though most are suggestions by individual delegates and are not discussed in parliament.
"It is recommended to carry out government guidance and development in specific areas such as online education, online healthcare and financial technology," CNR cited Ma's proposal as saying. Those are all areas in which Tencent is involved, though the report did not name specific businesses.
The proposal comes amid tighter scrutiny of China's tech giants, with regulators having drafted anti-monopoly rules and guidelines in recent months to limit collection of personal data by mobile apps.
Peer-to-peer payment platforms, as well as long-term property rental, bike-sharing and community group-buying platforms must pay close attention to the security of users' funds and be strictly monitored, CNR cited the proposal as saying.
China's market regulator on Wednesday fined five community group-buying platforms, including one company backed by Tencent, for what the watchdog said was "improper pricing behaviour".
Tencent, operator of China's ubiquitous messenging service WeChat, said that Ma, an NPC delegate from Guangdong province, would submit the proposal in a personal capacity and not on behalf of the company.
Thousands of delegates will gather in Beijing for the meeting of parliament, at which China will announce goals for 2021 as well as its next five-year plan for economic development.
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'Brawl Stars' unable to fight off sales decline for Tencent's Supercell
By: Reuters | February 16, 2021
HELSINKI (Reuters) - Finland's biggest video game maker Supercell reported a 7% drop in annual sales on Tuesday, squeezed by intense competition even as the COVID-19 pandemic pushed people indoors and boosted the broader gaming sector.
Supercell, majority owned by China's Tencent Holdings (OTC:TCEHY) and known for titles such as "Clash of Clans", said that "Brawl Stars", published in 2017 and the newest of its existing games, crossed the 1 billion euro mark in gross revenue early this year.
The company said overall user numbers rose year on year but increased marketing costs and the way Supercell books sales and expenses separately meant the benefit was not reflected in the annual financial statement.
"Well over a half of marketing costs come from investing in the gamer community," Chief Executive Officer Ilkka Paananen said in a statement.
The company did not disclose the extent of its marketing spending.
Global video game revenue is estimated to have surged 20% to $179.7 billion in 2020, according https://www.marketwatch.com/story/videogames-are-a-bigger-industry-than-sports-and-movies-combined-thanks-to-the-pandemic-11608654990 to IDC data, making the sector a bigger moneymaker than the global movie industry.
Supercell and rival mobile game maker Rovio, of "Angry Birds" fame, have struggled to generate revenue growth in the face of increasing competition from console games.
Supercell's games are free to download and the company makes its money from in-game purchases
Last year's annual revenue fell to 1.3 billion euros, down from almost 1.4 billion euros the previous year, while earnings before interest, taxation, depreciation and amortisation (EBITDA) dropped 21% to 407 million euros.
In the past two years Supercell has released and discontinued two games and now has five actively supported games.
($1 = 0.8232 euros)
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Tencent hit with fresh anti-monolopy complaint, this time from GM China venture
By: Reuters | February 8, 2021
Chinese tech giant Tencent Holdings Ltd has become the target of a fresh anti-monopoly complaint to regulators, this time from a supplier of smart vehicle technology and a General Motors Co China venture.
The supplier, Shanghai PATEO, in a statement accused Tencent of abusing its messaging app's dominant market position to restrict sales of its products.
PATEO offers voice recognition features and other mobile applications that rely on Tencent's all-in-one WeChat app. It added that Tencent has been asking car companies to stop using PATEO's Internet of Vehicles products since August 2020.
Tencent did not immediately respond to a request for comment. The GM venture with SAIC Motor Corp, which jointly submitted the request with PATEO, also did not immediately reply to a request for comment.
The new complaint comes just a week after ByteDance's Chinese version of TikTok called Douyin accused Tencent of monopolistic behaviour and filed suit in a Beijing court, seeking 90 million yuan ($14 million) in compensation.
Tencent has described that claim has false and said ByteDance was illegally using its users' data.
Chinese regulators have stepped up anti-trust scrutiny of tech firms since December, launching a probe into e-commerce giant Alibaba Group Holding Ltd and penalising Alibaba-backed and Tencent-backed firms for not seeking anti-trust reviews for deals.
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Tencent's Battle With ByteDance Could Attract Antitrust Regulators
By: Motley Fool | February 8, 2021
• TikTok's parent company is painting a bull's eye on Tencent's back.
ByteDance, the Chinese tech giant that owns TikTok, recently sued its larger rival Tencent (OTC:TCEHY) over alleged antitrust violations. ByteDance says Tencent blocked users on its WeChat and QQ apps -- which host 1.21 billion and 617 million mobile monthly active users, respectively -- from accessing content from Douyin, the Chinese version of TikTok.
ByteDance claims Tencent is blocking Douyin to promote WeChat's own short video channels, and it's asking for 90 million yuan ($14 million) in damages. Let's see how ByteDance's lawsuit could cause headaches for Tencent, which is already being scrutinized by antitrust regulators in China.
Trying to spark an antitrust probe
Over the past few months, China's SAMR (State Administration for Market Regulation) tightened its grip on the country's top tech companies. It fined Tencent and Alibaba (NYSE:BABA) over unapproved acquisitions last December, and recently introduced new rules to rein in China's two largest payment platforms, Tencent's WeChat Pay and Alibaba-backed AliPay.
The SAMR launched an antitrust probe into Alibaba's e-commerce business in late December, and demanded that its marketplaces end their exclusive deals with merchants and aggressive pricing strategies. Complaints from Alibaba's rivals, including JD.com and Pinduoduo, reportedly sparked that probe.
ByteDance likely wants to spark a similar antitrust probe against Tencent. Douyin currently reaches over 400 million daily active users in China, but it's still much smaller than WeChat and QQ.
Understanding Tencent's strategies
QQ, Tencent's older messaging platform, is gradually shrinking. But WeChat -- a monolithic app that hosts millions of integrated "Mini Programs" for online shopping, payments, food deliveries, ride-hailing services, online news, games, music, and more -- is still growing.
Tencent considers popular apps that pull users away from that walled garden, including ByteDance's Douyin and its news app Jinri Toutiao, to be long-term threats -- especially if it offers its own competing app or feature within WeChat.
Tencent previously barred WeChat's users from posting links to Jinri Toutiao's news stories. Tencent also didn't approve ByteDance's WeChat Mini Programs for its cloud-based office platform, Feishu. That's why it wasn't surprising when Tencent finally cut its users off from Douyin's videos.
Tencent likely cut off those apps to protect Tencent News, Tencent Cloud Office, and WeChat's short video channels from ByteDance's apps. Those moves certainly seem anti-competitive, and could cause the SAMR to closely scrutinize the relationship between WeChat, its integrated features, and Tencent's other mobile apps.
It's not about the money, it's about sending a message
ByteDance generated $37 billion in revenue last year, according to The Information, so a $14 million settlement would be a drop in the bucket. It also won't matter much to Tencent, which generated nearly $54 billion in revenue in the first nine months of 2020. Therefore, ByteDance's latest lawsuit against Tencent isn't really about the money -- it's about drawing regulators to Tencent.
ByteDance has sued Tencent before, but none of those legal challenges have been definitely resolved yet. However, its latest lawsuit represents the first time it openly accused Tencent of violating "antitrust laws" -- which could certainly get the SAMR's attention.
What's at stake for Tencent?
Analysts expect Tencent's revenue and earnings per share to rise 38% and 49%, respectively, this year. Next year, they expect its revenue and EPS to grow another 24% and 18%, respectively, as its gaming, advertising, social networking, fintech, and business services units all continue to generate double-digit percentage sales growth.
Based on those expectations, Tencent's stock still looks reasonably valued at about 40 times forward earnings -- even after it rallied nearly 90% over the past 12 months. However, analysts could quickly reduce those estimates if the SAMR drops the hammer on Tencent as it did on Alibaba.
Therefore, Tencent's investors should keep close tabs on these developments, which could spark a full-blown crisis if other companies follow ByteDance's lawsuit lead.
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TikTok owner ByteDance sues Tencent in China
By: Engadget | February 3, 2021
• ByteDance claims Tencent has been blocking Douyin content.
Two of China’s most visible tech companies are going to court. On Tuesday, TikTok owner ByteDance sued Tencent, according to Bloomberg. ByteDance claims Tencent broke the country’s antitrust laws by blocking people from accessing content from Douyin on WeChat and QQ. Tencent’s messaging apps need no introduction. Between the two of them, they have close to 2 billion monthly active users. Douyin, meanwhile, is a more expansive version of TikTok that is only available in China.
ByteDance is asking the court for approximately $14 million in compensation from Tencent and to stop the company’s actions. ”We believe that competition is better for consumers and promotes innovation,” a spokesperson for ByteDance told Bloomberg. “We have filed this lawsuit to protect our rights and those of our users.”
The two companies have feuded several times over the years, but this is the first time ByteDance has challenged its rival from the antitrust angle. The suit, likely not by accident, comes mere months after China opened an investigation into Jack Ma’s Alibaba group. Of course, Chinese tech companies aren’t the only ones facing antitrust scrutiny from local regulators. Google is currently the subject of three separate lawsuits in the US, with another one potentially on the way. In December, the Federal Trade Commission, along with 48 attorneys general, filed antitrust charges against Facebook.
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Tencent Nears $1 Trillion in Latest Sign of Global Tech Bubble
By: Bloomberg | January 25, 2021
A world-beating surge in Tencent Holdings Ltd. has pushed its market value to the cusp of $1 trillion for the first time, a marker for the euphoria sweeping global technology stocks.
The Chinese Internet behemoth jumped 11% in Hong Kong trading on Monday, its best gain since 2011 and taking its capitalization to almost $950 billion. The options market went wild, with one contract expiring Thursday soaring 118,300%. There were few obvious catalysts for a rally of that size, although traders cited an ambitious listing plan from video startup Kuaishou Technology, in which Tencent holds a stake, as well as a bullish note from Citigroup Inc. analysts.
What’s clear is Tencent is the most recent mega-cap company to benefit from investor enthusiasm for the tech sector. The stock has added $251 billion in January alone -- by far the biggest creation of shareholder wealth worldwide. Warnings are rising that easy monetary policy is fueling bubbles in global equities, especially in the U.S., where gains have been led by the Nasdaq.
As investors seek cheaper alternatives, they’ve piled into Hong Kong equities. That’s helped make the Hang Seng China Enterprises Index the best performing among the world’s major benchmarks in the past month. Adding fuel to the rally has been record inflows by mainland Chinese investors into the city’s equities. Tencent, whose WeChat social-media platform boasts more than a billion users, is the prime target, accounting for about a quarter of total cash coming in through the stock links.
“Stocks are overshooting,” said Jackson Wong, asset management director at Amber Hill Capital Ltd. “Obviously this has been driven by liquidity. Beijing wants to drive money into Hong Kong, and it’s encouraging lots of new ETFs and mutual funds to buy the city’s stocks.”
While Tencent has long been an investor favorite in Asia, returning more than 100,000% since its 2004 initial public offering, the stock is not without risk.
In 2018, a government crackdown on China’s online gaming industry squeezed Tencent’s most profitable business, which at the time accounted for about 40% of its revenue. Coupled with a slowing Chinese economy and a weakening yuan, Beijing’s nine-month halt on approvals for new games contributed to a 22% slump in the shares.
A campaign against monopolistic practices since late last year has targeted many of the industries in which Tencent and rival Alibaba Group Holding Ltd. operate, including the online payments industry. But while increasing regulatory risk has left Alibaba’s shares about 16% lower than their October peak, Tencent has closed at seven fresh records in the past eight sessions. One factor contributing to the divergence: Alibaba’s Hong Kong stock is not included in trading links with mainland exchanges.
Tencent would be the second Chinese firm to join the trillion-dollar club after PetroChina Co., which was briefly worth more than that in late 2007 before collapsing in value. U.S. tech giants Apple Inc., Amazon.com Inc., Alphabet Inc. and Microsoft Corp. are also worth more than $1 trillion each, as is Saudi Arabian Oil Co.
Tencent was founded in 1998 by four college classmates and a friend from Shenzhen who devised a Chinese version of the instant messaging service ICQ. Led by “Pony” Ma Huateng -- ma is Chinese for “horse” -- the company’s chat software became the primary communication tool for a generation of young Chinese.
Tencent reported net income of 38.5 billion yuan ($5.9 billion) in the three months ended September, boosted by a gain of 11.6 billion yuan from rising valuations for its investments in other companies. The rally in tech shares is likely to lift its earnings further, given its ownership of some of the industry’s largest players from JD.com Inc. and Meituan to electric vehicle maker NIO Inc.
Still, Tencent’s surge has outpaced all but the most bullish analysts’ forecasts. The stock’s closing level of HK$766.50 on Monday was almost 10% higher than the consensus 12-month price target compiled by Bloomberg, the widest gap since 2014.
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Where Fundamentals Meet Technicals: TCEHY
By: Lyn Alden Schwartzer | January 12, 2021
This week’s issue of “Where Fundamentals Meets Technicals” dives into an assortment of growth areas.
Tencent
Chinese stocks have whipsawed quite a bit recently.
The CCP has cracked down on some of the country’s big tech oligopolies, particularly Alibaba (BABA), to reign in their overall market influence.
The US Treasury listed a bunch of Chinese companies that will be illegal for Americans to invest in, including semiconductor and engineering/industrial firms. The largest was China Mobile, and the NYSE flip-flopped on whether to delist them.
Alibaba and Tencent (TCEHY) were briefly mentioned as possible additions to the list of stocks that Americans aren’t allowed to own, but were not included on the list, which knocked around their price a bit as that question was sorted out.
Delisting from exchanges is not a big deal for these large cap Chinese firms, since they’re not reliant on the capital. Tencent, for example, doesn’t even trade on the NYSE or NASDAQ. However, an outright blacklist that makes it illegal for Americans to own them, would be a huge deal for American investors and an ongoing tail risk to be aware of.
My base case is that these mega-stocks like Tencent and Alibaba will not be blacklisted within the next, say, 4+ years, because it would mess up every international/emerging index out there since they’re the largest two ex-US companies in terms of market cap in the world. The amount of lobbying by multi-trillion dollar asset managers and large banks to any administration against that would be quite big. However, it remains a nonzero possibility and investors should manage position sizes appropriately.
Garrett sees room left for Tencent’s bull run:
The fundamentals for it look quite good. The balance sheet is great, the growth is great, and the valuation is in line with its normal history, unlike US tech stocks that are off-the-charts in terms of valuation:
Chart Source: F.A.S.T. Graphs
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China's Antitrust Regulators Slam Alibaba and Tencent -- What Should Shareholders Do?
By: Motley Fool | December 16, 2020
• The two tech giants were just fined for unapproved and unreported acquisitions.
Last month, China's State Administration for Market Regulation (SAMR) drafted new antitrust rules aimed at the country's largest tech companies. It didn't call out any companies at the time, but it declared it would weed out "monopolistic practices" like price discrimination, the use of exclusive agreements to lock in merchants, and the compulsory collection of user data.
At the time, many analysts speculated the new rules would affect Alibaba (NYSE:BABA) and Tencent (OTC:TCEHY) the most. Those predictions recently came true, as regulators fined both tech giants and the logistics company SF Holding.
Let's see if Alibaba and Tencent's investors should be concerned.
What happened to Tencent?
Tencent's e-books subsidiary, China Literature, was slapped with another 500,000 yuan fine for failing to report its purchase of New Classic Media, a producer of TV shows and movies, in 2018. Tencent owns 59% of the company, which went public in Hong Kong three years ago.
That tiny fine won't hurt Tencent, which is expected to generate $72.7 billion in revenue this year. But it could rein in the expansion of its WeChat messaging platform, which locks in over 1.2 billion monthly active users with millions of integrated Mini Programs for payments, online orders, games, and other services.
Tencent aggressively tethers first-party and third-party apps, including China Literature, to that data-sharing ecosystem. Therefore, the move against China Literature could prevent other subsidiaries and affiliates, including Tencent Music and WeChat Pay, from expanding further via acquisitions.
Chinese regulators are also reportedly probing Tencent's planned merger of Huya (NYSE:HUYA) and DouYu (NASDAQ:DOYU), the country's two largest video game streaming platforms. The combined platform would serve over 300 million monthly active users, dominate the e-sports market, and complement Tencent's core gaming business and other streaming media platforms.
If that deal is blocked, Tencent's other ecosystem-building ideas -- including its rumored interest in buying a stake in Baidu's streaming platform iQiyi -- could quickly fizzle out. Those restrictions could make it tough for Tencent to leverage the strength of WeChat to enter new markets and affect all four of its main businesses -- video games, online advertising, social networking, and business and fintech services -- over the long term.
What should investors do?
Alibaba and Tencent already face concerns about new auditing standards and potential stock de-listings in the U.S., and the recent pressure from Chinese regulators is causing more headaches.
But neither headwind is as fierce as it seems: Chinese companies still have three years to comply with the new auditing rules in the U.S., while the recent fines and probes in China are merely warning shots against pursuing unapproved investments and acquisitions in the future.
Meanwhile, Alibaba and Tencent's core businesses remain strong. Alibaba's core commerce and cloud businesses are still generating double-digit sales growth, and Tencent's four businesses fired on all cylinders throughout the pandemic. Investors should keep an eye on these developments, but they shouldn't sell these high-growth stocks simply because regulators are flexing their muscles.
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Should Tencent Investors Worry About China's New Anti-Monopoly Rules?
By: Motley Fool | November 22, 2020
• Investors were likely relieved after the Chinese internet giant's reassuring conference call.
Chinese tech giants took a plunge earlier this month, after the country's State Administration for Market Regulation released guidelines for new rules to limit abuses of monopolistic power.
Many Chinese tech giants have come to dominate their respective fields, and use that considerable dominance to enter new business lines and head off competition. China's regulatory body has decided to do something about it, which spells uncertainty for many of these popular stocks. The catalyst may have come from the last-minute cancellation of Ant Financial's initial public offering, which came on the heels of contentiousness between China's regulatory body and Ant and Alibaba (NYSE:BABA) founder Jack Ma.
One of those companies getting caught up in the selling was online games, social media, payments and cloud conglomerate Tencent (OTC:TCEHY). However, on its recent third quarter conference call, management sought to reassure investors on the subject of these new regulations.
The regulations appear to be skewed to other businesses
According to management, one silver lining is that the new rules appear mostly to focus on e-commerce businesses such as online marketplaces and food delivery platforms. That may affect some of Tencent's investees, but not its core online games and social media businesses.
President Martin Lau elaborated, "with respect to the different sectors, right, I can't comment fully right now, but it looks like, right, from the paper that it's more related to transaction platforms. So for games which are essentially individual products rather than platforms, I think they are less of the focus."
Some of the regulations specifically target e-commerce platforms – for instance, Alibaba – which has historically at times required certain brands to sell on it platform exclusively or lose access. Other regulations, such as the offering steep discounts on items and taking a loss in order to block out smaller competitors, are also on the table. However, these really do tend to focus on e-commerce and not digital media, which is Tencent's main focus.
Tencent is typically a good actor on these issues
Fortunately, Tencent has a history of generally being a good actor and partner to others in China. For instance, on the same conference call, one analyst noted that Tencent and rival Netease (NASDAQ:NTES) used to dominate the top 10 online games in China; however, these days, that number has diminished, with these two companies only occupying four or five slots. Chief Strategy Officer James Mitchell said:
So how we think about the market dynamic is that it's a very healthy development. Our aspiration is not domination. And while the number of studios represented in the top 10 has diversified, you can see from our results that despite that, we've been able to maintain very healthy revenue and earnings trends in our game business.
With other companies becoming more competitive in online games, Tencent's main business is likely to sidestep most anti-monopoly regulations. Clearly, the increased size and diversity of the online games business hasn't hurt Tencent much, whose online gaming revenue grew a whopping 41% last quarter.
Tencent has already made it through one regulatory firestorm and come out the other side
Speaking of online games, it should be noted that Tencent has already been through the ringer with regards to government regulation before -- in fact, in the very recent past. In early 2018, China halted all new video game approvals. There was concern about gaming addiction among China's youth, and the government reorganized its regulations and regulatory body for approving video games. New approvals were halted for almost a year, only to be resumed later in 2018, and slowly at first. But eventually, Tencent adapted to the new rules, and has obviously gone on to be quite successful in the online gaming space since then.
A scare provides an opportunity
Most of the Chinese tech stocks that declined on the regulatory news have since stabilized or recovered some of their losses. Final anti-monopoly rules have not been finalized yet, but as they come into formation, investors will be better able to choose which companies will be most affected and least-affected. My guess is that Tencent will be among those that make it through the current regulatory gauntlet relatively unscathed.
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Tencent-Backed Chinese Online Brokerage Futu Jumps On Earnings
By: Investor's Business Daily | November 19, 2020
Futu Holdings (FUTU) crushed earnings views for a third quarter in which trading volumes surged amid continued market volatility and a strong market for U.S. and Hong IPOs of Chinese companies. In Thursday's trading, Futu stock jumped.
Futu Earnings
IBD 50 stock Futu, backed by gaming and social media giant Tencent (TCEHY), earned HK$3.09 (39 cents) per ADS, up from HK$0.17 (2 cents) a year ago. Revenue jumped 272% to HK$946.2 million (US$122.1 million). One Wall Street analyst was expecting Futu earnings per share of 4 cents on revenue of $96.73 million, according to Yahoo Finance.
Brokerage commission income increased 356%; interest income rose 140% and other income surged 555%.
In Q3, the Chinese online brokerage and wealth management platform saw the number of paying clients jump 137%. Client assets increased 178%. Daily average client assets rose 152%. Total trading volume vaulted 381%, with U.S. stock trading contributing 56% of the total. Daily average revenue trades shot up 273%. Margin financing and securities lending balance increased 171%. Its wealth management business recorded 29,000 clients as of quarter end.
" The strong IPO market continued to play in our favor," said Futu CEO Leaf Hua Li. He highlighted the U.S. IPOs of Xpeng Motors (XPEV) as well as a couple of Hong Kong IPOs.
Shares of Futu surged 8.1% to 46.47 in Thursday stock market trading. Futu stock topped a second-stage cup base with a 41.09 buy point on Nov. 13 and quickly moved out of buy range, according to MarketSmith chart analysis. A pre-earnings dive Wednesday brought shares back in the buy zone. The relative strength line for Futu stock looks bullish. It's the blue line in the chart shown.
Futu Holdings debuted in March 2019 at 12 in a hot market for Chinese IPOs. The fast-growing Hong Kong-based brokerage taps the growing, newly affluent Chinese middle class, with fully digitized brokerage offerings.
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NEWS: $TCEHY China Gets Ready to Rein in Baidu, Alibaba, and Tencent
Many of China's top tech stocks recently tumbled after Chinese regulators drafted new antitrust rules targeting the country's top internet companies. The proposed rules target "monopolistic practices" like price discrimination, preferential treatment for online merchants who sign exclu...
In case you are interested TCEHY - China Gets Ready to Rein in Baidu, Alibaba, and Tencent
Just In: $TCEHY Are These The Best Social Media Stocks To Buy Before The End Of 2020?
Looking for Top Social Media Stocks To Buy In 2020? Investors who are looking for high growth investments often come across social media stocks . Today, we have a whole plethora of social media platforms to choose from. It is simple supply and demand if you think about it. With ...
In case you are interested TCEHY - Are These The Best Social Media Stocks To Buy Before The End Of 2020?
NEWS: $TCEHY Is Huya Stock a Buy Now?
Huya (NYSE: HUYA) , a leading game-centric, live-streaming platform in China backed by Tencent Holdings (OTC: TCEHY) , saw its share price almost double from its March low on the back of the strong recovery in technology stocks . For investors who missed the boat ea...
In case you are interested TCEHY - Is Huya Stock a Buy Now?
Tencent-Backed Miniso Climbs in Debut After $608 Million IPO
By: Bloomberg | October 15, 2020
Miniso Group Holding Ltd. rose 4.4% in its trading debut after its $608 million U.S. initial public offering exceeded the goals of the Chinese budget household and consumer goods retailer.
The company’s American depositary shares closed at $20.88 Thursday in New York trading, giving the company a market value of $6.35 billion.
Miniso sold 30.4 million shares for $20 each on Wednesday after marketing them for $16.50 to $18.50.
The company’s backers include Tencent Holdings Ltd., according to its filings with the U.S. Securities and Exchange Commission. Each depositary share will represent four ordinary shares.
The listing followed 33 others on U.S. exchanges this year by companies based in China and Hong Kong that raised a combined $9.74 billion, according to data compiled by Bloomberg. Despite the coronavirus pandemic, that’s more than double last year’s total of about $4 billion raised in 35 listings.
Read More: Investors Shrug Off U.S.-China Tensions With Miniso: ECM Watch
The offering was led by Goldman Sachs Group Inc. and Bank of America Corp. The shares are trading Thursday on the New York Stock Exchange under the symbol MNSO.
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Chinese tech giant Tencent's WeChat app sees downloads surge before U.S. ban
By: Reuters | September 21, 2020
HONG KONG (Reuters) - Chinese tech giant Tencent's WeChat messaging app has seen a surge in downloads in the United States since Friday after Washington confirmed it would push ahead with a planned ban of the app, data showed on Tuesday.
The U.S. Department of Commerce issued an order requiring Apple Inc and Alphabet Inc's Google to remove WeChat for downloads on national security grounds, but a U.S. judge blocked the move on Sunday. The U.S. Commerce Department said on Monday it will challenge the order.
WeChat was installed about 54,000 times between Friday and Saturday, 28 times the 1,900 downloads seen in the same two-day period a week before, according to data analytics firm Sensor Tower. It said WeCom, an office collaboration app, also saw a jump in downloads in the United States over that period.
The United States has launched a series of measures in recent months cracking down on Chinese tech firms and apps, citing national security grounds, as the world's two largest economies butt heads on issues ranging from trade and technology to the handling of the coronavirus pandemic.
Tencent, which has denied its apps pose a national security risk, has said updates of the app for existing U.S. users may be negatively affected should Apple and Google remove WeChat from their stores.
WeChat is an all-in-one mobile app that combines messaging, social media, payment functions and other services and boasts more than a billion users globally.
WeCom, which was rebranded from Tencent's office collaboration app WeChat Work only days after U.S. President Donald Trump first said he would ban WeChat in August, was installed 58,000 times in the United States on Friday and Saturday, 193 times the 300 downloads it saw over the same period a week prior, according to Sensor Tower estimates.
After downloading WeCom, users can now link their WeChat account to it and add their WeChat contacts, a Reuters test showed. WeCom users can then message, create chat groups, and even receive virtual money from WeChat friends without their WeChat contacts having to download WeCom.
Tencent told Chinese media WeCom is a completely different product from WeChat.
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Tencent Shares Up on White House Assurance About WeChat Ban
By: TheStreet | August 24, 2020
• Tencent shares rose after the White House reportedly assured U.S. companies that a ban on the internet giant's WeChat app won't be broad as feared.
Tencent Holdings (TCEHY) shares were higher after the White House reportedly assured U.S. companies that a ban on the Shanghai internet giant's WeChat app won't be broad as originally feared.
The Trump administration is privately seeking to reassure U.S. companies including Apple (AAPL) that they can still do business with Tencent’s WeChat messaging app in China, Bloomberg reported.
As a result, the company's shares rallied 5.8% at the close in Hong Kong Monday, making them the best performer on the benchmark Hang Seng Index.
At last check Tencent American depositary receipts were up 5% at $69.55.
Senior administration officials have been contacting some companies, realizing that the impact of an all-out ban on the popular app could devastate U.S. technology, retail, gaming, telecommunications and other industries, people familiar with the matter told Bloomberg.
The ban had erased roughly $66 billion from Tencent’s value, Bloomberg said, though Monday's rebound means the stock has recouped all but $9 billion of those losses.
In addition to messaging and calls, WeChat serves as a platform for everything from payments and ride-hailing to productivity and e-commerce.
On Aug. 6 President Donald Trump signed an executive order saying that within 45 days, U.S. persons and companies will be barred from making "transactions" with WeChat ByteDance's TikTok.
Analyst Ming-Chi Kuo of TF International Securities estimated that in a worst-case scenario - in which WeChat is banned entirely from Apple's App Store, in every region - Apple's iPhone shipments could take a 25% to 30% hit.
China accounts for about 15% of Apple's overall revenue in a typical quarter, and wiping out WeChat could quash iPhone sales almost entirely in China and for other customers around the world who rely on WeChat. WeChat's monthly active user base is estimated at 1.2 billion worldwide.
Senior administration officials are deliberating over the scope of the ban ordered by Trump, Bloomberg said, and the president could ultimately overrule anything they decide.
Separately, a WeChat users group called U.S. WeChat Users Alliance, which says it isn’t affiliated with Tencent, on Friday sued the Trump administration, claiming the order is unconstitutional.
The lawsuit, filed in U.S. District Court in San Francisco, claims the ban violates WeChat users’ rights to free speech, due process and equal protection under law, and illegally targets Chinese-Americans, The Wall Street Journal quoted one of the alliance's attorneys as saying.
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Tencent Shares Lose $66 Billion in 2-Day Rout on WeChat Ban
By: Bloomberg | August 10, 2020
Tencent Holdings Ltd. added to Friday’s sharp decline to start the week, putting the stock’s two-day loss of market value at $66 billion following America’s move to ban residents from doing business with the company’s WeChat app.
The stock fell 4.8% Monday and nearly reached Friday’s low. The cumulative 9.6% drop, the worst two days since October 2011, followed a four-month, 70% surge which put shares into record territory and made the internet giant Asia’s most valuable company at nearly $700 billion.
Tech stocks in Hong Kong led declines in the city Monday, with the Hang Seng Tech Index falling as much as 3.6%. The sector was also among the weakest performers in China, with the ChiNext Index dropping as much as 2%. Suppliers to Apple Inc. saw some of the biggest declines.
Why Tencent and WeChat Are Such a Big Deal in China: QuickTake
Deteriorating relations between the U.S. and China are raising investor concerns about the geopolitical impact on economies and markets. In addition to the the WeChat ban, Trump signed an order to prevent U.S. residents from doing business with ByteDance Ltd.’s TikTok app starting in six weeks.
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The World’s Tech Giants, Ranked by Brand Value
By: Visual Capitalist | August 5, 2020
The World’s Tech Giants, Ranked by Brand Value
The pandemic has businesses everywhere on the ropes, with many firms filing for bankruptcy since lockdowns began. Despite the uncertainty, tech giants and major digital retail brands are still thriving—and some are running circles around those that are less pandemic-proof.
Using data from Kantar and Bloomberg, a recent brand report released by BrandZ shows which tech companies are proving their worth to consumers during COVID-19 chaos. With data covering almost 4 million consumers, BrandZ also reveals that the tech sector leads the world’s 100 most valued brands in terms of financial power and consumer sentiment.
Here’s how the top 20 tech brands from the report stack up:
Rank Company Brand Value (2020)Change (%)
#1 ???? Apple $352 billion +14%
#2 ???? Microsoft $327 billion +30%
#3 ???? Google $324 billion +5%
#4 ???? Tencent $151 billion +15%
#5 ???? Facebook $147 billion -7%
#6 ???? IBM $84 billion -3%
#7 ???? SAP $58 billion 0%
#8 ???? Instagram $42 billion +47%
#9 ???? Accenture $41 billion +6%
#10 ???? Intel $37 billion +17%
Tencent's new blockbuster US game studio is led by a 'GTA' veteran
By: Engadget | July 5, 2020
• It's hoping to create more hit games outside of its native China
Tencent is determined to have more of an impact on gaming outside of China, and not just by pouring money into existing studios. Reuters reports that Tencent Holdings has created a new California studio, LightSpeed LA, that will develop and publish “AAA” (read: blockbuster) titles. The team will be led by former Rockstar Games studio manager Steve Martin and will have alumni from both Rockstar as well as 2K Games, Insomniac and Sony.
The Grand Theft Auto veteran didn’t outline what LightSpeed would work on, but joined the wave of companies hoping to end crunch time with promises of a “stress-free work environment.”
There’s not much mystery behind the strategy. Tencent want half its gaming revenue to come from beyond China, and that means developing games suited to wider audiences like its upcoming Pokémon Unite battler. The new studio won’t end concerns that Tencent is becoming a dominant force in gaming outside of China (it owns Riot Games and has a minority stake in Epic Games), but it could show what the tech giant is capable of with a US team made from scratch.
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In cloud clash with Alibaba, underdog Tencent adopts more aggressive tactics
By: Reuters | July 2, 2020
HONG KONG/SHANGHAI (Reuters) - For Chinese cloud services companies, the coronavirus outbreak has become a rainmaker, bringing in new business far and wide as firms shift work online and authorities develop apps and systems to help contain outbreaks and manage social restrictions.
For Tencent Holdings Ltd in particular, it has also become the perfect time to flex new muscles as it seeks to catch up with Alibaba Group Holding Ltd, its arch-rival and the dominant player in the country's cloud market by far.
Tencent began to display a new level of aggressiveness after positioning its cloud business as a major area of growth in September 2018, and that has only amped up amid the pandemic, employees say.
"The competition with Alibaba is so fierce right now, the sales teams are fighting them for every deal," said a source in Tencent's cloud division who was not authorised to speak on the matter and declined to be identified.
This year alone, Tencent has hired more than 3,000 employees for its cloud division. And as China went into lockdown and demand for corporate video bandwidth surged in February, it added 100,000 cloud servers in eight days to support a two-month old product, Tencent Conference - a feat the company says is unprecedented in Chinese cloud computing history.
It has expanded use of cloud servers designed in-house, pledged to speed up construction of a digital industry centre in Wuhan to handle cloud and smart city projects in central China and joined a central government initiative to support pandemic-hit small businesses with free cloud services.
The social media and gaming behemoth also announced in May it will invest 500 billion yuan ($70 billion) over five years in technology infrastructure including cloud computing - just weeks after Alibaba said it would invest 200 billion yuan in its cloud infrastructure over three years.
Poshu Yeung, vice president of Tencent's international business group, notes huge interest in shifting further into the cloud from businesses and for online education.
"We actually see more demands, requests coming in," he told Reuters in an interview in April. "It's a good wakening call for a lot of businesses."
During the first quarter, China's cloud infrastructure services market grew an impressive 67% from a year earlier to $3.9 billion, data from research firm Canalys shows.
Alibaba commanded 44.5% of the market while Tencent, which started its cloud business in 2013, four years after Alibaba, had just 14%. Huawei Technologies Co Ltd also had 14%.
"Although Tencent came to the space later than Alibaba, I believe the company is willing to endure a relatively long period of investment cycle for this business, hoping to catch up or one day becoming the No. 1 player in this field," said Alex Liu, tech analyst at China Renaissance.
Tencent's cloud division accounted for more than 4.5% of its annual revenue last year while Alibaba's cloud computing division accounted for 8% of its overall revenue.
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Tencent employees have told Reuters the company is working hard to become more adept in business-to-business sales where products are often designed from the ground up for one client, as well as in government relations. Those are areas where Alibaba excels while Tencent's strength lies more with consumer-centric products and design.
"Tencent has great genes in business-to-consumer, but in business-to-business, we either didn't have product managers or we just hired folks with a business-to-consumer background so it took a bit of time to convert their thinking," said a second Tencent source in the company's cloud business.
Tencent declined to comment on staff observations about its cloud business to Reuters.
One area where Tencent has gained ground in recent years is government contracts - a relatively small part of the market in revenue terms but one that brings prestige and helps attract private-sector clients.
Underscoring its determination to win tenders, Tencent in 2017 offered to complete a Fujian province government information platform project for 0.01 yuan.
From 2016 to 2017, Alibaba scored 28 cloud-related contracts for government entities, state-owned enterprises, and academic institutions, while Tencent landed just seven, government procurement records show.
But in 2018, they secured 28 each before Alibaba took the lead again last year with 49 compared to Tencent's 46.
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Tencent Could Dominate China’s Online Video Market by Investing in iQiyi
By: Motley Fool | June 18, 2020
• Will the Chinese tech giant merge the country’s two largest paid streaming video platforms?
iQiyi's (NASDAQ:IQ) stock recently surged after Reuters claimed Tencent (OTC:TCEH.Y) could buy a major stake in the video streaming giant. Baidu (NASDAQ:BIDU) spun off iQiyi in an IPO two years ago, but maintains a 56.2% stake in the company.
iQiyi and Tencent Video are the two largest subscription-based streaming video platforms in China. iQiyi served 119 million subscribers last quarter, while Tencent Video reached 112 million subscribers.
Reuters' initial report, which cited two unnamed sources, claimed Tencent's could replace Baidu as iQiyi's largest shareholder. But Baidu's PR director Guo Feng subsequently announced the company would still support iQiyi's development, and the platform would remain a key part of its content strategy.
Feng didn't directly address the investment rumors, but his statement suggests Baidu might not surrender control of iQiyi to Tencent. However, Tencent could still possibly buy a significant stake in iQiyi -- which could cut costs by reducing competition and sharing content between the two platforms.
Those synergies could help iQiyi, which has bled red ink for years, finally turn a profit. The investment could also help Tencent dominate China's online video market and widen its moat against top rivals Alibaba (NYSE:BABA) and ByteDance.
Understanding Tencent's streaming media ambitions
Tencent generates most of its revenue from online games, online ads, and its business and fintech services, which include Tencent Cloud and WeChat Pay.
Last quarter, Tencent generated 58% of its revenue from value-added services (VAS), which include in-game purchases and paid subscriptions for Tencent Video and Tencent Music (NYSE:TME), the largest music streaming company in China.
Tencent's total VAS revenue rose 27% year-over-year during the quarter, as the COVID-19 crisis and social distancing measures boosted in-game spending and streaming subscriptions. Tencent Video's total subscriptions grew 26% annually, buoyed by the releases of new Chinese drama and anime series, as Tencent Music's subscriptions jumped 50%.
Tencent's media advertising revenue, which accounted for just 3% of its top line, fell 10% annually as macro headwinds and the suspension of live sports curbed ad purchases aimed at its free ad-supported streaming users. Merging Tencent Video's free users with iQiyi's would create a larger advertising platform with more pricing power.
Taking control of iQiyi would complement Tencent's other moves
Tencent's previous media moves also indicate it would prefer to take control of iQiyi instead of remaining a minority stakeholder subservient to Baidu.
Back in 2016, Tencent created Tencent Music by merging three of China's most popular music streaming platforms -- QQ Music, Kugou, and Kuwo. That combined ecosystem served 657 million mobile monthly active users (MAUs) last quarter.
Tencent also owns significant stakes in two of the world's three largest record labels, Universal and Warner Music, while the third -- Sony Music -- owns a stake in Tencent Music. Those tight partnerships enable Tencent Music to secure favorable royalty rates, and allow it to sub-license its songs to competing streaming media platforms.
Tencent also owns major stakes in Huya (NYSE:HUYA) and DouYu, the two largest e-sports streaming platforms in China. Tencent replaced JOYY as Huya's majority stakeholder earlier this year, which sparked speculation it could merge the two platforms into a single market-leading platform like Tencent Music.
In that context, it makes sense for Tencent to wrestle control of iQiyi away from Baidu. A combination of the two platforms would tower above Alibaba's Youku Tudou -- which ranks third behind iQiyi and Tencent Video -- and bolster its clout in royalty negotiations with content providers.
The strength of a combined Tencent Video/iQiyi ecosystem would also shore up Tencent's defenses against ByteDance, which is disrupting the online video market with its viral short video app TikTok (known as Douyin in China).
But it's all speculation for now...
Tencent's takeover of iQiyi could be a game-changer for China's online video market, but it's unclear if Baidu -- which still relies on iQiyi for most of its revenue growth -- will let go of the subsidiary. Therefore, investors should simply monitor the situation instead of aggressively scooping up shares of iQiyi and betting on a takeover.
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Chinese tech giant Tencent forms alliance to promote blockchain development
By: The Block | June 8, 2020
Chinese tech giant Tencent’s cloud service, Tencent Cloud, has launched an alliance to promote the development of the blockchain industry.
The alliance aims to attract 100 members this year, including tech companies, industry associations, universities, and think tanks, local outlet Securities Times reported last week. Members plan to establish blockchain industry standards and research potential blockchain applications.
To that end, the alliance will form three committees - standards, technical, and business ecosystem committee. The standards committee will cooperate with government agencies and other relevant parties to develop national blockchain standards.
The technical committee will plan and build blockchain applications, while the business ecosystem committee will drive sales of products developed by alliance members. Tencent estimates that members will increase their business conversion rates by 30%.
The first batch of the alliance includes Beijing Zhulong Information Technology as one of the members. The company has previously worked with Tencent Cloud to build a blockchain product using its blockchain-as-a-service platform TBaaS.
Tencent appears to be betting big on blockchain. Last month, the company said it would invest $70 billion over the next five years in technology infrastructure, including blockchain. Tencent recently also launched a blockchain accelerator, mentoring 30 firms in the space.
China's national blockchain committee includes executives from Tencent, and the company is also one of the top blockchain patent application filers, having filed over 700 applications last year.
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Tencent Is Pouring $70B Into New Tech Including Blockchain
By: Coindesk | May 26, 2020
Chinese internet giant Tencent is looking to invest heavily in new technologies like blockchain as it looks to move past the effects of the coronavirus epidemic.
The creator of popular messaging service WeChat, Tencent is investing 500 billion yuan ($70 billion) into “new infrastructure” based on emerging technologies over the next five years, as reported by Reuters.
In an interview with state media Tuesday, Dowson Tong, Tencent’s senior executive vice president, confirmed the company had also earmarked investment for sectors such as cloud computing, artificial intelligence and cybersecurity.
It isn’t clear how much of the $70 billion investment Tencent will ultimately set aside for blockchain, nor has it elaborated on what specifically it will be investing in.
As per Reuters, the firm has acknowledged its cloud offerings have been hit by the coronavirus-induced economic slowdown. As the nation starts its return to normality, “Expediting the ‘new infrastructure’ strategy will help further cement virus containment success,” Tong said in a report by Guangming Daily.
The news comes a month after China’s Blockchain Services Network (BSN) was rolled out for commercial use. Blockchain is a critical part of the country’s tech strategy, and the government hopes BSN will form the backbone infrastructure for services that leverage the technology all around the country.
China’s steadfast support for DLT is paying dividends, believes Haipo Yang, founder and CEO of Chinese crypto exchange CoinEx. Speaking to CoinDesk recently, he explained this unambiguous approach has helped create a “good environment for blockchain technology,” improving China’s credentials as an innovation hub and leading to the emergence of a vibrant blockchain investment scene.
Tencent has gradually increased its exposure to blockchain. At the end of last year, it launched a DLT-powered invoice system and received the green light from the Hong Kong regulator to start work on a blockchain-based virtual bank. It’s also become a member of a new national committee to help set industry standards for blockchain technology, along with several of its competitors.
With blockchain being a state-sanctioned technology in China, and with the infrastructure for a whole host of new services – the BSN – having already launched, it should come as no surprise Tencent has opted to set aside potentially billions of dollars for investment in the emerging technology.
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Tencent is taking over troubled RPG 'System Shock 3'
By: Engadget | May 21, 2020
- The Chinese company will be 'taking the System Shock franchise forward.'
Chinese conglomerate Tencent will be “taking the System Shock franchise forward,” developer OtherSide Entertainment has announced. A few days ago, ownership of the System Shock 3 website was transferred to Tencent Holdings, sparking rumors that the Asian company will work on the RPG franchise’s upcoming sequel. Now, OtherSide has confirmed the reports.
System Shock 3 was announced way back in 2015. As Eurogamer notes, it suffered from various setbacks, including losing its publisher Starbreeze due to money troubles. While we saw a pre-alpha glimpse of the game at GDC 2019, reports that the game is no longer in development circulated earlier this year.
In a follow-up tweet, OtherSide said that it’s been difficult to work on the game on its own as a small indie studio and that working with Tencent is the right way to go.
In a statement sent to Eurogamer, NightDive Studios said that OtherSide only transferred “certain rights” to make sequels to the Chinese corporation. NightDive, which is working on a remake of the first System Shock for modern consoles, still owns the System Shock IP.
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Tencent Sees Q1 Revenue Surge As China Lockdown Boosts Gaming, Video Subscriptions
By: TheStreet | May 13, 2020
• Tencent said time spent online is likely to decease in the months ahead as lockdown conditions ease, but still posted more than $15.2 billion in first quarter revenues.
Tencent Holdings (TCEHY) posted stronger-than-expected first quarter earnings Wednesday as video subscriptions and gaming revenues at Asia's biggest tech company surged during China's coronavirus lockdown.
Tencent said net profit for the three months ending in March came in at 28.9 billion Chinese yuan ($4.07 billion), up 6.2% from the same period last year and well ahead of the Street consensus forecast of 23.83 billion yuan. Group revenues, Tencent said, rose 26.4% to 108 billion Chinese yuan, again beatings analysts' forecasts of a 101.4 billion tally.
"In the first quarter of 2020, we harnessed the power of technology to enable users to stay connected, informed and entertained, to help advertisers reach target audiences effectively, and to assist enterprises in achieving service continuity," Tencent said.
"Looking forward, we see several likely industry-wide headwinds, including consumer time spent online normalising which will lead to lower advertisement impression growth, online services advertisers adjusting their customer acquisition budgets to reflect revised life time value assumptions, and multinational brands sharply reducing their global marketing budgets as they faced the pandemic in their home markets."
Tencent's U.S. listed shares were little-changed in pre-market trading Wednesday following the earnings release to indicate an opening bell price of $55.35 each.
Tencent's two main online platforms -- WeChat and Weixin -- saw monthly average user growth rise 3.2% from the last quarter, and 8.2% on the year, to nearly 1.202.5 billion.
Video game revenue rose 31% from last year to 37.3 billion yuan, "primarily reflected revenue contributions from domestic smart phone games such as Peacekeeper Elite and Honour of Kings", while smartphone gaming revenue rising to 34.8 billion yuan, .
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Tencent's PUBG Mobile Has Taken the Battle-Royale Crown
By: Motley Fool | April 14, 2020
• The mobile game had its best-ever month by far in March.
Tencent's (OTC:TCEHY) Player Unknown's Battlegrounds (PUBG) Mobile topped the mobile app revenue charts for the third straight month this year, according to data from Sensor Tower. The mobile entry in the popular battle-royale genre posted record player spending in March, raking in $232 million in revenue -- increasing 21% compared February's sales and more than tripling year over year. Tencent's Honor of Kings also charted well in the month, recording $112 million in revenue and coming in as the second-highest grossing mobile game for the period.
The battle-royale genre (which sees players competing against each other on large maps to be the last person standing) rose to incredible popularity in 2018. While Fortnite was once the undisputed sales champion of the genre, PUBG Mobile now has much more momentum and is crushing the rival game on smartphone and tablet platforms. Tencent also owns a 40% stake in Epic Games -- the company responsible for Fortnite.
How is PUBG Mobile growing so fast?
Video games have seen heightened levels of engagement as people have been isolating and staying inside in response to conditions created by the novel coronavirus pandemic. PUBG Mobile also benefited from the launch of special in-game events last month that celebrated the game's two year anniversary and offered special player incentives.
Its more than three-fold March sales increase also partially stems from the title's release timing in China. The game (which exists in a modified format in China and goes by the name Peacekeeper Elite) had to be changed in the country to meet regulatory standards before being rereleased last May. Tencent's battle-royale hit has seen fantastic momentum since relaunching with monetization privileges, and the Chinese market accounted for roughly 61% of the title's sales last month.
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Chinese tech giants Tencent, Alibaba filed for the most blockchain patents last year
By: The Block | April 12, 2020
Chinese tech giants Tencent and Alibaba filed the most blockchain patent applications in 2019, according to research conducted by The Block’s Steven Zheng.
Tencent and its affiliates filed for 718 blockchain patents out of a total of over 5,800, while Alibaba Group filed 470. Together, they accounted for over 20% of the total.
Tencent and Alibaba were followed by WeBank, Ruize Technology, and Ant Financial, in that particular order - and all these three companies are also based in China.
Overall, about 63% of firms with over 20 blockchain patent filings are based in China. The U.S. follows next. It is worth noting that while 2019 saw over 5,800 patent applications, only 3% of them were granted in the same year.
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