TCEHY may potentially benefit from an unusual near term catalyst in the form of a listing in mainland exchanges. It does make sense for similar logic to apply to their Chinese counterparts, like large-cap stock Alibaba ( BABA ) which I highlighted previously, and TCEHY, the stock we are focusing on in this article. I currently have conviction buy ratings on both these names. This is a very common investment thesis here in the states, one which I have used to invest in large cap tech darlings FB and Alphabet ( GOOG), both of which have little to no exposure to China. These companies by in large see their markets confined within Chinese mainland (currently at least) and thus ironically the “isolation” means there is very little direct revenue exposure to the United States. I believe that there yet still exists a group of stocks which will experience significant less volatility in earnings due to the trade war, namely the large-cap Chinese technology stocks. This is definitely due to the ongoing “trade war” between the two countries, as investors scramble to make sense of the potential impact to earnings.įor some this may simply be the time to buy the overall Chinese market though an ETF such as the iShares MSCI China ETF ( MCHI) - others however, including your author, may still harbor reservations and doubts about the true aftermath of a fallout with the United States. The Shanghai Index, used widely as a gauge for the Chinese stock market, has traded sharply lower this year, greatly underperforming the S&P 500: (Note: dollar amounts are listed in Chinese dollars, unless otherwise noted.) Buy when there is blood on the streets I rate shares a conviction buy on the recent trade war related weakness. TCEHY is however one of the most misunderstood stocks in the market, as many see WeChat, $35.5 billion USD in revenues and think “the growth has tapped out.” Because their current revenue base is actually significantly derived from a world class collection of video games, not WeChat, this has created a cloak over the hidden advertising growth potential in WeChat. The mobile game has 93 million daily active users (DAUs) and it might be able to attract millions of mobile users to the platforms of Tencent Holdings Ltd (HKG:0700), which is currently facing strong competition from Alibaba Group Holding Limited.Tencent ( OTCPK:TCEHY) is often called the “Facebook ( FB) of China” due to their WeChat app. Its sales performance is the highest worldwide.Ĭandy Crash Saga is a free game and King Digital Entertainment PLC (NYSE:KING) makes money when players buy virtual items. The mobile game generated around $493 million revenue in the fourth quarter last year. We are looking forward to bringing great moments of fun to Chinese users soon.” Candy Crash Saga tops sales chartsīased on the regulatory filing of King Digital Entertainment PLC (NYSE:KING), Candy Crash Saga was the most downloaded app in 2013. ![]() We are excited that our collaboration will combine King’s enjoyable mobile gaming experience and Tencent’s strong game publishing and operation capabilities in China. On the other hand, Steven Ma, senior vice president of Tencent Holdings Ltd (HKG:0700) said the Chinese internet service provider always intended to bring global premier mobile games to China. I look forward to working together to make Candy Crush Saga as popular in China as in the rest of the world.” Tencent has the largest mobile social network in China and is a great partner to work with. In a statement, Riccardo Zacconi, chief executive officer said, “I am thrilled to be launching Candy Crush Saga with Tencent in China. The British digital games developer introduced Candy Crash Saga in Japan and Korea last year. ![]() ![]() Further expands presence in Asian marketsįurther expands presence in Asian marketsĪccording to King Digital Entertainment PLC (NYSE:KING), its agreement with Tencent Holdings Ltd (HKG:0700) will further expand its presence in Asian markets.
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