#1 - Tencent Holdings (OTC:TCEHY)
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.
About Tencent
Tencent Holdings Limited, an investment holding company, offers value-added services (VAS), online advertising, fintech, and business services in the People's Republic of China and internationally. It operates through VAS, Online Advertising, FinTech and Business Services, and Others segments. The company's consumers business provides communication and services, such as instant messaging and social network; digital content including online games, videos, live streaming, news, music, and literature; fintech services, which includes mobile payment, wealth management, loans, and securities trading; and various tools, such as network security management, browser, navigation, application management, email, etc.
Read More - Current Price
- $52.41
- Consensus Rating
- N/A
- Ratings Breakdown
- 0 Buy Ratings, 0 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- N/A
