0700.HK - Tencent Holdings Limited
| Previous Close | 349.600 |
| Open | 346.000 |
| Bid | 346.400 x 0 |
| Ask | 346.600 x 0 |
| Day's Range | 339.800 - 346.600 |
| 52 Week Range | 251.400 - 400.400 |
| Volume | 23,372,263 |
| Avg. Volume | 14,533,877 |
| Market Cap | 3.311T |
| Beta (3Y Monthly) | 1.53 |
| PE Ratio (TTM) | 36.52 |
| EPS (TTM) | 9.491 |
| Earnings Date | Nov 12, 2019 - Nov 19, 2019 |
| Forward Dividend & Yield | 1.00 (0.29%) |
| Ex-Dividend Date | 2019-05-17 |
| 1y Target Est | 388.16 |
- TheStreet.com
China's 'Big Four' Internet Cos. Suffer Ad-Sales Slowdown
Rapid growth in online advertising is slowing -- by Chinese standards -- creating potential headaches for Weibo and Tencent.
- InvestorPlace
Big-Time Break Out for Nio Stock?
Nio (NASDAQ:NIO) has quickly and quietly rocketed off its recent lows, climbing more than 25% in just a few trading sessions. It's got many investors wondering if Nio stock is set to run even higher over the ensuing days and weeks.Source: Carrie Fereday / Shutterstock.com One year ago, Nio stock went public on the New York Stock Exchange. With many dubbing it the "Tesla (NASDAQ:TSLA) of China," it should come as little surprise that it's been a volatile ride for the all-electric car maker.While the company debuted two electric vehicles more quickly than Tesla delivered its Model S and X, it hasn't generated the same fanfare that Tesla has. A big part of that, in my view, is thanks to Elon Musk.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Tesla versus NioDie-hard Tesla fans think of Musk as the saving grace to our earth. The one who will electrify the transportation market and slingshot the industry into the next century. All while fighting off short-sellers, FUD (fear, uncertainty, doubt)-writers and the evil auto and energy sectors. * 7 Discount Retail Stocks to Buy for a Recession Of course, his detractors have the exact opposite view: that he's a lying narcissist pulling the wool over investors' eyes whenever he so pleases.Then there's everyone else in between, who recognize Musk for what he is. An incredible entrepreneur who at times would benefit from putting his foot in his mouth and turning off his Twitter (NYSE:TWTR) account.Love him or hate him, embrace him or tolerate him, it's hard to argue the value Musk has brought to Tesla stock. While shares are down roughly 10% over the last five years, they're up more than 600% in six-and-a-half years. Also, TSLA is up approximately 1,000% in the last 10 years.Enough about Musk and more about Nio stock.All of this is to say that NIO doesn't have a Musk. Someone that can sell their product, that can create hype, generate headlines and get people taking notice. In a capital-intensive, low-margin business, that's exactly what a company like Nio needs. Someone who can get investors, customers and observers excited about their product.That's not to say NIO or others can't succeed without a Musk, but it makes life much easier. Trading Nio StockBoth the 20-day and 50-day moving averages are now trending higher for NIO stock. More importantly though, Nio is above downtrend resistance (blue line). Last month, this trend line squeezed Nio below $3, eventually sending it down to a low off $2.58 at the start of the month.However, that move was very important, at least as far as short-term developments go. When Nio stock bottomed at $2.58 and rallied, shares had notched yet another higher low. This is shown on the chart via purple arrows, as well as a purple uptrend line.While a series of higher lows is not necessarily a screaming buy signal, it is a bullish technical development. The only problem? The stock has been decimated over the past year. In 2019 alone, the Nio stock price is down 50%. From its highs, it's even worse, down a catastrophic 72.5%.So, what do bulls need to see now? They want to see Nio stock maintain above the 50-day and 20-day moving averages, and most importantly, not break the trend of higher lows. If shares can continue higher, $4 may be in the cards. Bottom Line on NIOThe technicals are starting to behave better for Nio stock; now it needs the fundamentals to improve as well.There are talks about a bottom in China's struggling auto market, while the company just raised $200 million in convertible debt via CEO William Li and Tencent (OTCMKTS:TCEHY). That's promising and should help fund Nio's capital-intensive business as it tries to turn free cash flow positive.Losses are still big for Nio and that's to be expected from an automaker. Again, just look at Tesla. Despite its global presence, the company still has trouble churning a positive bottom line.Speaking of its global presence though, Tesla is working to complete its Gigafactory 3 in China. While the country is the world's largest electric car market, increased Tesla competition could make it harder for Nio to win over customers.The bottom line: for those that are bullish on Nio stock, the chart is beginning to shape up. If the fundamentals improve, shares could go on a run. Below $2.50 causes concern. Remember, this is still a speculative holding.Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Big IPO Stocks From 2019 to Watch * 7 Discount Retail Stocks to Buy for a Recession * 7 Stocks to Buy Benefiting From Millennial Money The post Big-Time Break Out for Nio Stock? appeared first on InvestorPlace.
- Bloomberg
Naspers's Prosus Unit Divides Investment Bank Opinions
(Bloomberg) -- Prosus NV, which listed in Amsterdam just last week, is splitting opinion among the first investment banks to cover the stock.While Jefferies rates the Naspers Ltd. tech-investments unit underperform, Bank of America Merrill Lynch recommends that investors buy the stock.Jefferies began coverage of Prosus, which owns a 31% stake in Chinese tech giant Tencent Holdings Ltd., with a price target of 61 euros, implying a downside of around 16% from current levels.Analyst Ken Rumph wrote in a note that there is “frustration” that while Naspers and Prosus have been good investors, there has been no return of any gains. While unattractive operations were spun off and the Dutch listing accessed more passive capital, the e-commerce disclosure remains “thin” for a public company, Rumph also said. He expects Prosus’s net asset value to be largely driven by Tencent.“After current index flows, we expect Prosus to trade back toward a wider discount as active investors realize they have an ambitious patient capital investor, not a value-maximizing wind-up on their hands,” he wrote in a note.Bank of America Merrill Lynch analyst Cesar Tiron is more optimistic, with his 97-euro price objective implying potential upside of 33%. Prosus offers exposure to “best-in-class” emerging-market internet assets, he wrote in a note.Cape Town-based Naspers carved out Prosus for a separate listing to attract a more global investor base and realize more value, while weakening the group’s dominance over the Johannesburg stock exchange.Prosus shares fell as much as 2.1% Monday and traded at 72.97 euros as of 12:47 p.m. Amsterdam time, with the retreat taking them 4% below their 76 euros debut level last Wednesday.Last week, Spin-Off Research began its coverage of Prosus with a buy rating and 99 euros price target.(Updates to add BofAML rating and analyst comments.)To contact the reporter on this story: Kit Rees in London at krees1@bloomberg.netTo contact the editors responsible for this story: Celeste Perri at cperri@bloomberg.net, John Viljoen, Paul JarvisFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Financial Times
EU must face up to ‘weaponisation’ of trade
”, September 13) is a perfect example of how trade is now a significant part of the global powers’ national security strategy. The ongoing arguments between China and the US is not simply a “trade dispute”. With the rise of China’s dominance in global economic and financial affairs, the US is now explicit about the existential threat to the western consensus.
- Benzinga
Credibly's Partnership With Wirecard Continues The Digitization Of Lending
Nowhere else in the economy are these themes of speed and reliability more highly prized than among small- and medium-sized business owners. In the 2019 edition of its annual Small Business Credit Survey, the Federal Reserve found that a lender’s speed of decision-making and business owners’ perception that their funding requests would be met were far-and-away the top reasons driving applications for financing to online lenders. Just this week, small business lender Credibly announced a partnership with Wirecard (OTCMKTS: WCAGY), a leading issuer of payout cards, aimed at further improving the speed at which applicants can be approved for and receive financing.
- Reuters
UPDATE 1-Tencent bids for Chinese car site Bitauto with JD's backing
Tencent Holdings Ltd and private equity partner Hammer Capital have offered $16 per share to buy out the other shareholders in Chinese car comparison website Bitauto Holdings Ltd, valuing the company at just under $1.2 billion. The offer from the Chinese e-commerce giant came at a premium of 16.4% to Bitauto's Thursday close and is backed by shareholders that own more than 48.5% of the company, including JD.com Inc. Tencent owns a 7.81% stake in the company.
- Bloomberg
China’s Uber-for-Trucks Breaks Even En Route to IPO
(Bloomberg) -- China’s Uber-for-trucks startup Full Truck Alliance said it’s weighing an initial public offering after breaking even from May, defying a sector-wide downturn.The company, which is backed by SoftBank Group Corp. and Tencent Holdings Ltd., said its improved financial performance dovetailed with its decision not to follow through on a plan to raise as much as $1 billion in a private round, Chief Financial Officer Richard Zhang said during an interview with Bloomberg TV.“We broke even both in the accounting and cash flow sense,” said Zhang. “I don’t want to commit to a timetable here, but eventually we probably want to go for an IPO.” The company also hasn’t decided whether it will need to do a pre-IPO round, Zhang added.Despite dominating the truck-sharing sector in China, Full Truck Alliance is now confronted with the same challenges that on-demand businesses world-wide face -- proving its business model can lead to sustainable revenue and profit growth.Much also depends on conditions in the market. Bets on a once red-hot Chinese technology sector are cooling alongside waning economic growth. In July, investments made by venture capital and private equity firms dropped 60% to 407 cases, while the amount plummeted around 78% to 32.8 billion yuan ($4.6 billion), according to research consultant Zero2IPO. Investors in the sector have also been spooked by WeWork’s IPO setback.Formed by a merger between China’s two largest truck-sharing platforms -- Huochebang and Yunmanman-- the company has attracted backers including Sequoia and Alphabet Inc.’s CapitalG. It was said to be planning to raise as much as $1 billion at a valuation of about $9 billion, Bloomberg reported late last year. Zhang confirmed the company didn’t complete that round, adding that Full Truck Alliance’s valuation stood at $6.4 billion post-money after it raised funds in April 2018.By creating a marketplace that connects millions of mostly independent truckers, the company makes money by charging a fee when brokering transactions, and from servicing drivers by selling top-up toll cards and directing them to service stations.The company is also expanding into automotive technology and is now the largest external investor in autonomous trucking startup Plus.AI. The Cupertino-based company co-founded by David Liu formed a joint-venture with China’s state-backed heavy truck manufacturer FAW Jiefang, introducing their first commercial product (a Level-2 semi-autonomous truck) earlier this month.Plus.AI is currently in talks with new investors for funding, Liu said during the interview.To contact the reporters on this story: Lulu Yilun Chen in Hong Kong at ychen447@bloomberg.net;Yvonne Man in Hong Kong at yman9@bloomberg.netTo contact the editors responsible for this story: Edwin Chan at echan273@bloomberg.net, Colum MurphyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Bloomberg
China Video App Seeks Funds at $25 Billion Value Before IPO
(Bloomberg) -- Chinese startup Kuaishou is considering to a U.S. initial public offering to bankroll its expansion in short videos and fend off competition from TikTok-owner ByteDance Inc., according to people familiar with the matter.The company, backed by Tencent Holdings Ltd., plans to list next year, the people said, requesting not to be named because the matter is private. One person said Kuaishou also weighed the option of going public this year. The video startup is raising more than $1 billion at a $25 billion valuation in a pre-IPO round mostly from Tencent, one of the people said.Kuaishou is an important part of Chinese social media giant Tencent’s strategy to compete against ByteDance, now the world’s most valuable startup. Tencent has devoted a lot of resources toward building a library of short and mini video offerings -- key to retaining user attention and boosting advertising revenue -- but has yet to catch its rival.“Tencent’s biggest enemy is ByteDance right now,” said David Dai, a Hong Kong-based analyst at Bernstein. “Tencent hasn’t been very successful in short videos in the past, so resorting to investing in other companies instead is its best option.”U.S.-listed shares of some of Kuaishou’s competitors fell. Momo Inc. fell 2.8%, the most in more than a week, while DouYu International Holdings Ltd. fell 1.9%, the most in about a month. Both under-performed the Nasdaq, which rose 0.3%.Read more: Tencent Tumbles After China’s Slowdown, ByteDance Hit Ad SalesTencent President Martin Lau said during an August earnings call that short and mini videos would be a key vertical for expansion.Kuaishou or “fast hand” first established its popularity among users in China’s smaller cities and rural areas, with people streaming slices of everyday life from harvesting corn to slurping noodles. It’s also been luring users in bigger cities and expanding its content to include everything from people playing video games to teenagers lip-syncing songs.Kuaishou was seeking funds in January last year at a valuation of $17 billion. The eight-year-old company, which was valued at $3 billion in January 2015 by CB Insights, also counts Sequoia and Morningside Group Holdings as backers. It had 110 million daily active users as of December 2017, according to its website. Annie He, a spokeswoman for Kuaishou didn’t respond to requests for comment. Tencent declined to comment in an emailed statement.“Kuaishou is the only one that can still counter ByteDance now,” Dai said.(Updates with shares from the fifth paragraph and adds chart.)To contact the reporters on this story: Crystal Tse in Hong Kong at ctse44@bloomberg.net;Lulu Yilun Chen in Hong Kong at ychen447@bloomberg.netTo contact the editors responsible for this story: Peter Elstrom at pelstrom@bloomberg.net, ;Fion Li at fli59@bloomberg.net, Colum Murphy, Edwin ChanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- InvestorPlace
A Tempting Chart and Possible Trade War Truce Won’t Save JD.com Stock
In breaking news on Wednesday, President Trump announced that he would delay scheduled tariffs against China by two weeks. As he put it, the delay represents a goodwill gesture to China, and comes at the request of China's Vice Premier, Liu He. And on the surface, this development seemingly bodes well for JD.com (NASDAQ:JD) and by extension JD.com stock.Source: Michael Vi / Shutterstock.com After jumping to a strong start earlier this year, JD stock encountered upside resistance around the $31 level. In the beginning of April, shares tried to break past this level, but failed, sparking a downward slide. Later in May, JD.com stock tried to break beyond $31, but the markets again stymied the effort.During the past summer, the e-commerce and technology firm enjoyed some strong sessions. In fact, JD.com stock moved beyond the aforementioned resistance level a few times. Unfortunately, the efforts ultimately went for naught.InvestorPlace - Stock Market News, Stock Advice & Trading TipsIn the one-year chart for JD stock, we can clearly see a consolidation pattern. As InvestorPlace's Tom Taulli noted recently, this pattern is setting shares up for either a breakout or a breakdown. My colleague argues for the former, noting some strong fundamental catalysts. These include a robust and growing Chinese middle class, greater allocation of Chinese GDP to domestic consumption, and an upwardly moving e-commerce market. * 10 Stocks to Sell in Market-Cursed September Significantly, Taulli also mentioned that the trade war could be beneficial for JD stock. That's because the dispute has driven China to focus on its domestic economy, bolstering JD in the process.With this latest gesture from an otherwise strident Trump, it seems the case for JD.com stock breaking out is won. So, should you act on this diplomatic news? JD.com Stock Remains UnconvincingObviously, President Trump extending a small but meaningful olive branch is important. In the nearer term, no one should be surprised to see names like Alibaba Group (NYSE:BABA) and Tencent (OTCMKTS:TCEHY) jump higher.When it comes to China-related developments, the news seemingly kept getting darker for JD stock. With the U.S. and Chinese administration set to discuss their differences, this is the positive narrative that the bulls needed.But the story doesn't end there. Even from early in his administration, President Trump earned a reputation for flip-flopping. Granted, every politician contradicts themselves; otherwise, they wouldn't be politicians. That said, Trump can turn on a dime.Infamously, Trump stated in 2017 that North Korea will be met with "fire and fury" if the hermit nation threatened the U.S. In June of this year, Trump characterized his relationship with North Korean dictator Kim Jong Un as a "great friendship."Therefore, JD.com stock has a credibility problem, but it has nothing to do with the underlying company. Instead, we really don't know what's going to happen next. Of course, uncertainty is something that Wall Street dislikes.I'm not sure what the probabilities are regarding a trade deal in the nearer term. But based on Trump's unpredictable nature, I wouldn't bet too high on a resolution. Remember, Trump must look strong to his voting base because he's losing support elsewhere.Therefore, if a deal doesn't materialize, JD stock risks significant volatility. While many China bulls tout the country's massive middle class, we got to put those numbers into context. With a population size of over 1.4 billion people, on a GDP-per-capita basis, the Chinese are still poor. Plus, initiatives to push into China's lower-ranked cities may not pan out due in part to the country's sizable percentage of agricultural workers. What Happens If We Get a Deal?Suppose though that we do get a deal. Does that optimistic scenario spell game on for JD.com stock?Here again, I remain hesitant. I hate to bring up a politically controversial subject, but questions exist regarding China's economic data. For instance, in June of this year, the Chinese city of Guanghan allegedly falsified its economic data.This scandal brings up an uncomfortable topic: when we say that China's middle class is growing robustly, what data is that based on?Additionally, I'm inclined to believe the negative reports as opposed to the fluff stats. Because if China's middle class is booming, why are their auto sales plummeting? Other metrics are falling too. A trade deal probably won't fix these core problems. * 10 Battered Tech Stocks to Buy Now Therefore, the smart move is likely to wait out JD stock. Sure, the technical pattern is interesting. But with a volatile President and an even more volatile economic situation, gambling here seems more risky than rewarding.As of this writing, Josh Enomoto did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Sell in Market-Cursed September * 7 of the Worst IPO Stocks in 2019 * 7 Best Stocks That Crushed It This Earnings Season The post A Tempting Chart and Possible Trade War Truce Won't Save JD.com Stock appeared first on InvestorPlace.
- InvestorPlace
3 Reasons That NIO Stock Is Still a Buy at the Bottom
The last year has been rough riding for investors in Nio (NYSE:NIO). Nio is just one of 486 Electric Vehicle (EV) manufacturers in China fighting for a piece of the world's largest auto market. Since the NIO stock IPO a year ago -- almost exactly -- quickly hit an all-time intra-day high of $13.80, a volatile path has Nio stock has down at $3.25. Source: THINK A / Shutterstock.com The reason for this rollercoaster price action? Nio stock price has often been buoyed when it is touted in the media as the up and coming Tesla (NASDAQ:TSLA) of China. But then investor expectation comes back down to earth over the trade war, Nio's declining revenues and four straight quarters of losses -- with no near-term turn around in sight. * Take Buffett's Advice: 5 Vanguard Funds to Buy Investor sentiment is decidedly skittish on the Chinese EV market -- but Nio in particular. Competition is ruthless, and Nio's cash burn is turning into a forest fire. For the quarter ending December 31, Nio burned through nearly $370 million in cash. By any account, bankruptcy lawyers at major Shanghai law firms should be circling overhead ready to pounce on Nio. InvestorPlace - Stock Market News, Stock Advice & Trading TipsBut when there is blood on the streets, value investors are also ready to pounce.Despite considerable downside risk, Nio stock still may represent an excellent strategic bet in the days leading to the next earnings announcement on September 24 for the second quarter of 2019.Here are three reasons why Nio stock should not be dumped just yet: 1) Tencent Holdings Putting Money on Nio's Roulette TableLast week, Tencent Holdings (OTCMKTS:TCEHY) and NIO's CEO William Li, announced a $200 million investment into Nio's convertible debt. This type of private placement, where Nio will pay a mere 2% interest, strongly suggests that Li was able to convince Tencent there's considerable upside in Nio stock. Convertible debt is often issued to companies with mediocre credit, but excellent long-term prospects. The debt can be converted into an option to buy equity at a price determined at issuance. Tencent is a giant Chinese conglomerate hedge fund with investments across the globe in e-commerce, gaming, internet-related services, media, entertainment, artificial intelligence, and technology. In this case, Nio equity is dirt cheap. Tencent and it's CEO Ma Huateng -- often called the Warren Buffett of China -- could stand to make a multiple of their initial $200 million convertible debt investment if Nio stock price takes off. If Nio goes under, by contrast, the $200 million will likely be wiped out. 2) Nio Is Not Just a Car -- It's a Lifestyle ConceptNio has long sought to position itself not merely as a manufacturer of metal vehicles with four wheels. Instead, much like Toyota Prius and Tesla, Nio wants to be seen as a lifestyle concept. Prius owners were not merely buying a car; they were making a statement about environmental sustainability. Similarly, Nio is positioning its product line as an uber-trendy fashion statement. This branding approach will help differentiate Nio from the massive competition in the Chinese EV market. Nio is spending heavily to establish its fashion credentials. For example, according to their corporate press release, NIO and Central Saint Martins University of the Arts, the London-based art and design college, teamed up to launch their "Blue Sky Thinking" global community of designers. The innovative design initiative brings together design talent and creates environmentally friendly designs for not just Nio EVs, but also fashion and accessories. While Nio EVs may not be parading down the catwalk at New York Fashion Week, Nio nonetheless wants to be seen as a fashion must-have. And Nio is spending to create that brand identity. 3) Nio Does Make a Quality ProductDespite the rough start for Nio stock and its shaky top-line revenues, Nio does make a quality product. Just last July, J.D. Power released its Inaugural China New Energy Vehicle Experience Index Study. In the J.D. Power study, the NIO ES8, their latest model, ranked highest among midsize/large EVs. For the NIO product range as a whole, Nio ranked highest of all brands for new energy vehicle and new-vehicle quality.Indeed, there is no guarantee that Nio will rebound anytime soon. The next quarterly earnings call could bring even more bad news for already hard-hit Nio stockholders. But one way or the other, particularly with deep-pocket financial backers like Tencent holdings, Nio should survive. * 10 Battered Tech Stocks to Buy Now With every downtick in price, Nio stock becomes an even better long-term value play. As of writing, Theodore Kim does not hold any position in the above mentioned stocks. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Battered Tech Stocks to Buy Now * 7 Strong-Buy Stocks Hedge Funds Are Buying Now * The 7 Best Penny Stocks to Buy The post 3 Reasons That NIO Stock Is Still a Buy at the Bottom appeared first on InvestorPlace.
- InvestorPlace
Things Look Precarious for IQ Stock Post Q2 Earnings Disappointment
The challenges facing Chinese streaming video play iQiyi (NASDAQ:IQ) are myriad, and they've pressured IQ stock.Source: natmac stock / Shutterstock.com iQiyi stock has rallied so far this year, gaining 21%, but it's faded of late. Those gains, meanwhile, are coming after the stock hit an all-time low in late 2018.In recent months, at a cheaper price, I've come around to the bull case for IQ stock. In June, I called it the best play for those still bullish on China long-term.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThat's not to say the risks weren't, and aren't, significant. The Chinese economy continues to struggle amid a trade war with the U.S. Competition is intense, most notably from Tencent (OTCMKTS:TCEHY) and Alibaba (NYSE:BABA) unit Youku Toudo. iQiyi still is burning cash as it grows. Majority owner Baidu (NASDAQ:BIDU) is struggling, leading to the possibility of further sales of iQiyi stock.iQiyi's second-quarter report last month seems to highlight, if not increase, those risks. Investors largely have shrugged off the report, as IQ stock trades above where it did before the release. * 10 Stocks to Sell in Market-Cursed September But on this site, Luke Lango argued the report wasn't enough, and I'm inclined to agree. iQiyi still has an intriguing long-term case, but the near-term risk to IQ stock seems to be rising. Growth Slows, but IQ Stock Holds UpFrom a headline standpoint, iQiyi's second-quarter earnings report looks close to disastrous. Revenue growth decelerated dramatically. In Q1, revenue in yuan increased by 43% year-over-year. Growth in Q2 was just 15%.To be fair, there's a key culprit outside of the company's control: the Chinese macroeconomic environment. Advertising revenue declined 16% year-over-year in the second quarter, after a ~flat performance on the same basis in Q1. CEO Tim Gong Yu noted that "a lot of advertisers constrained their advertising budgets," on the Q2 conference call.In the subscription business, iQiyi generated new members toward the end of the quarter thanks to new content. And so membership revenue increased just 38% despite a 50% increase in the quarter-end subscriber count.Both factors are understandable, and indeed the 15% increase was in line with Street estimates. That said, Q3 guidance for revenue growth of just 4-10% suggests a further decline in the top-line growth rate.At the same time, iQiyi's spending isn't going anywhere. Operating loss widened by over 40% year-over-year. Content costs increased by just 7%, but selling and marketing expenses both rose sharply.Perhaps surprisingly, investors saw the quarter as reasonably in line: iQiyi stock only fell 1% the following day. It may be that 50% subscriber growth and decent performance in a tough environment was good enough, particularly given the fact that IQ stock had slid heading into the release. The Risks to iQiyi StockThat said, there are some concerns in the report upon closer inspection. One, in particular, is the fact that subscriber growth came in toward the end of the quarter. As management noted, that boost came as the content was released, which itself is a bit of a concern.The worry is that iQiyi essentially can't stop spending on content, or else subscriber growth slows or stops. It's an echo of the worry facing Netflix (NASDAQ:NFLX), to which iQiyi is often, and somewhat incorrectly, compared.The bullish case for both stocks is that building out a content library with upfront spending will result in enormous cash flow down the line, as that content is monetized. If, however, consumers come to expect more and better content in perpetuity, the hamster wheel never stops spinning. The correlation between content spend and subscriber growth thus is somewhat discomfiting, even at this early stage in iQiyi's growth.The other concern is on the advertising front. Macro weakness is a headwind, to be sure. But iQiyi management also noted an increase in the supply of online advertising inventory, which is pressuring pricing.That's a big risk. Price reductions come off the operating profit line at almost 100%. And the combination of higher inventory and macro concerns suggests ad revenues can be pressured into 2020 at least. Investors hoping for near-term profitability may have to wait longer than they expected. Dented, but Not BrokenTo be sure, Q2 earnings don't break the case for IQ stock. Investors in U.S. markets seem reasonably content with the idea that Chinese companies may struggle for a few quarters. The long-term opportunity, however, still remains.That's true for iQiyi as well. That said, it's hard not to see near- to mid-term risk rising after the second-quarter report. This still is a company with a market cap of over $13 billion, no profitability, and decelerating growth. That's usually a recipe for disaster.Add in the underlying concerns in both the subscription and advertising businesses, and IQ stock at least seems like a candidate for a decline when broad markets stumble. And if Q3 shows further revenue deceleration and wider losses, it may not take a market sell-off for iQiyi stock to start falling again.As of this writing, Vince Martin has no positions in any securities mentioned. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Sell in Market-Cursed September * 7 of the Worst IPO Stocks in 2019 * 7 Best Stocks That Crushed It This Earnings Season The post Things Look Precarious for IQ Stock Post Q2 Earnings Disappointment appeared first on InvestorPlace.
- Financial Times
Fear and oppression in Xinjiang: China’s war on Uighur culture
When Gulruy Asqar first heard that her nephew Ekram Yarmuhemmed had been taken away by the Chinese police, she feared it was her fault. It was 2016, and she had recently moved to the US from Xinjiang, the region in north-west China that is the traditional homeland of her people, the Turkic-speaking Uighurs. Asqar, an elementary schoolteacher, knew that as part of the Chinese Communist party’s security crackdown on Uighur Muslims, receiving money from relatives outside the country was a red flag that could attract the authorities’ attention.
- Bloomberg
Can Europe's $130 Billion Tech Giant Avoid Yahoo’s Fate?
(Bloomberg Opinion) -- Europe is getting its own version of Softbank Group Corp. with the Amsterdam listing of tech investment firm Prosus NV. The move will likely help it avoid the fate of Yahoo Inc., the erstwhile Silicon Valley titan which has since fizzled away as a holding company.South African media and internet firm Naspers Ltd. has spun most of its technology investment out into Prosus. That new company, like its parent (which retains a stake of more than 73%), derives almost all of its 121 billion-euro ($133 billion) market capitalization from a 31% stake in Tencent Holdings Ltd., the Chinese internet behemoth behind WeChat. That’s much like Softbank, which trades at a discount to its investment in China’s Alibaba Group Holding Ltd.Bob van Dijk, the chief executive of both Prosus and Naspers, intended the Amsterdam listing to reduce the discount to the $131 billion value of the Tencent investment.Naspers came to constitute about 20% of the Johannesburg stock exchange; that means index funds had to sell shares in order to meet limitations about concentrating too much ownership in one stock. The stock started to underperform Tencent shares the moment it exceeded a 10% weighting, as Bloomberg Intelligence analyst John Davies has pointed out.On that basis, the listing has so far been a success. When Naspers announced the spin-off in March, it was trading at a near 30% discount to its Tencent stake, taking into account its net cash position. Now Prosus is trading at a discount of just 3% to its Tencent shares, net of cash but not including other investments.Prosus is home to more than just the Tencent stake. It houses most of the technology investments made by Naspers, including stakes in Delivery Hero AG, Mail.Ru Group Ltd. and PayU. The value of the publicly-traded entities alone is 4.1 billion euros. Including these, Prosus still has a discount of perhaps 20% to its sum-of-the-parts valuation.The question for van Dijk and his team remains to what extent they can break the stock’s lockstep with the Tencent share price. If they can’t, then Prosus risks becoming little more than a proxy investment, and follow the fate of Yahoo.That American firm, after selling its eponymous internet assets to Verizon Communications Inc. in 2017, rebranded as Altaba Inc., and became a holding company for investments in Alibaba and Yahoo Japan Corp. Their combined value persistently exceeded Altaba’s valuation by some 25%. It is now dissolving those holdings and shutting up shop.Some sort of mark down is always likely to be the case, partially because Prosus shareholders, like those of Altaba, have no real say in the running of the firm’s biggest investment. Tencent management is after all not directly accountable to Prosus investors. And there continue to be overhanging concerns about governance, as I have written before.Given all that, the relatively slim Prosus discount – compared to Altaba, at least – suggests investors are in fact affording some value to its portfolio of investments besides Tencent. Does that mean they would rather van Dijk reduce the Tencent stake (he says he has no plans to do so) and reinvest the proceeds elsewhere? Probably not.There are reasons why Prosus might continue to close the valuation gap. Inclusion on Amsterdam’s Euronext indices over the next few months ought to attract index funds, for instance. And some more lucrative exits such as the the 1.6-billion-euro profit Naspers made on India’s Flipkart would reassure shareholders that van Dijk is making the right investment calls.Van Dijk has taken a healthy step to bring the company more in line with the value of its holdings. But now he can’t as readily point towards technicalities as a reason for the discount, he needs to prove his ability to deliver the investment returns that justify spending shareholders’ money.To contact the author of this story: Alex Webb at awebb25@bloomberg.netTo contact the editor responsible for this story: Stephanie Baker at stebaker@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Alex Webb is a Bloomberg Opinion columnist covering Europe's technology, media and communications industries. He previously covered Apple and other technology companies for Bloomberg News in San Francisco.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
- Reuters
Naspers spin-off Prosus surges 25% on Amsterdam market debut
Shares in Prosus, a spin-off from Naspers that includes the e-commerce group's 31% stake in Chinese tech giant Tencent, surged more than 25% on their stock market debut in Amsterdam on Wednesday, creating one of Europe's largest internet companies. Prosus comprises South African group Naspers' global empire of consumer internet assets, including the stake in Tencent, the world's biggest video game company and home to China's hugely popular WeChat social media platform. "We've become so big that further growth of our company on the JSE (Johannesburg Stock Exchange) would be difficult," Naspers CEO Bob van Dijk told reporters after the listing, which values Prosus at more than $100 billion.
- Bloomberg
Naspers Unit Soars in Debut to Close Discount With Tencent
(Bloomberg) -- Want the lowdown on European markets? In your inbox before the open, every day. Sign up here.Naspers Ltd.’s newly listed internet unit received an enthusiastic early response from investors, soaring on its trading debut to close a valuation discount to its biggest investment, Chinese tech giant Tencent Holdings Ltd.Prosus NV, as the new Amsterdam-listed company is known, jumped as much as 32% in early trading to value the business at about 125 billion euros ($138 billion). The group’s 31% stake in WeChat creator Tencent is worth about $131 billion, the result of a timely investment made almost two decades ago.The investor reaction is an early vindication of the strategy masterminded by Naspers Chief Executive Officer Bob van Dijk, who took the helm of the Cape Town-based company five years ago. His plan to carve out Prosus into a new listing in Amsterdam was designed to attract a more global investor base and realize more value, while weakening the group’s dominance over the Johannesburg stock exchange.The move to Euronext is “to facilitate our next phase of growth,” Van Dijk said in an interview with Bloomberg TV just after the market opened. Prosus’s classified-ads business is the largest in the world, while the group also sees fast expansion in internet payments, food delivery and online trading in second-hand goods, he said.While the discount to Tencent was all but wiped out, the firm is still trading below the sum of its parts when you add other assets, including shareholdings in Russia’s Mail.Ru Group Ltd. and Delivery Hero SE of Germany. Van Dijk’s next challenge will be to generate higher returns from those investments and prove that Prosus isn’t merely a proxy for holding Tencent stock.“Our next step will be to bed down and invest in our core business units,” Chief Financial Officer Basil Sgourdos said by phone.Shares in Prosus -- a Latin word meaning ‘forwards’ -- declined slightly after the early surge. The value as of 11:28 a.m. in Amsterdam was 121 billion euros, making it the third-largest publicly traded company in the Netherlands, behind Royal Dutch Shell Plc and Unilever NV. Its market value rivals that of Europe’s biggest tech company, Germany’s SAP SE.Naspers is retaining a 73% stake in Prosus, and will keep hold of South African businesses including the newspapers that form the basis of the company’s origins a century ago. Its stock rose in Johannesburg, trading 5.4% higher as of 11:28 a.m. local time.“Naspers has been looking to unlock value in the steep discount applied to its Tencent holding and the successful listing of Prosus today has certainly gone some way to achieving that target,” said Neil Campling, an analyst at Mirabaud Securities. “Prosus is not only the Tencent holding though.”(Updates with CFO comment in sixth paragraph.)\--With assistance from Swetha Gopinath, Anna Edwards, Matthew Miller and Kit Rees.To contact the reporters on this story: Loni Prinsloo in Johannesburg at lprinsloo3@bloomberg.net;John Bowker in Johannesburg at jbowker2@bloomberg.netTo contact the editors responsible for this story: Thomas Pfeiffer at tpfeiffer3@bloomberg.net, Jennifer RyanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Financial Times
Naspers internet tech spin-off valued at €123bn as shares soar
A company holding Naspers’ stakes in internet technology groups such as Tencent soared in its Amsterdam stock trading debut, valuing it at €123bn, which instantly propelled it to the top echelons of Europe’s biggest listed companies. Shares in Prosus opened on the Amsterdam bourse on Wednesday at €76, well above a reference price of €58. The listing has instantly made Prosus Europe’s largest consumer internet company and the third-largest stock in Amsterdam behind Royal Dutch Shell and Unilever.
- Reuters
Naspers spin-off Prosus surges 25% on market debut in Amsterdam
Shares in the spin-off of South African e-commerce group Naspers surged more than 25% in the first minutes of their market debut in Amsterdam on Wednesday. Prosus comprises Naspers' global empire of consumer internet assets, with the jewel in the crown a 31% stake in Chinese tech titan Tencent. There is "way more demand than is even available, so that’s good," said the CEO of Euronext Amsterdam, Maurice van Tilburg.
- Bloomberg
Naspers Sets $105 Billion Value for Assets Including Tencent
(Bloomberg) -- Naspers Ltd. is all set to list internet assets including Tencent Holdings Ltd. in Amsterdam after valuing the newly created group at about 95 billion euros ($105 billion).New entity Prosus NV will have 1.62 billion shares priced at 58.70 euros each when it debuts at 9 a.m. on Wednesday, according to a statement from the Euronext stock exchange. The firm will become the Netherlands’ third-largest listed company, behind Royal Dutch Shell Plc and Unilever NV.Naspers will retain 73% of the new company, which will house everything from a 31% stake in Chinese online giant Tencent to food delivery and advertising firms from the U.S. to India and Brazil. Africa’s biggest company by market value built up the portfolio of global assets after investing in Tencent as a startup, turning a $32 million outlay into a stake currently worth $128 billion.Read More: Investor’s Guide to the $100 Billion Naspers Spinoff: ECM WatchThe listing is designed to achieve two main objectives for Cape Town-based Naspers. First, Chief Executive Officer Bob van Dijk wants to attract more international investors to assign more value to the company’s non-Tencent assets, which the market rates at less than zero. Second, the spinoff will reduce Naspers’s dominance of Johannesburg’s stock exchange, where it’s by far the biggest company. Read More: Naspers Prepares to List Global Empire From Ads to Tencent“Outside of Tencent, Naspers’ biggest asset is its exposure to online classifieds,” said Alastair Jones, an analyst at New Street Research in London. “The business is monetizing in 10 countries and already reports $875 million of revenues, with the potential to begin monetizing in another 20 countries. The opportunity is therefore massive, and execution is key.”Naspers shares traded 0.2% lower at 3,522.82 rand at the close in Johannesburg on Tuesday, valuing the company at 1.6 trillion rand ($109 billion). Tencent rose 0.7% to HK$342.60 as of 1:37 p.m. in Hong Kong. (Updates with Tencent shares in the final paragraph)\--With assistance from Swetha Gopinath.To contact the reporter on this story: Loni Prinsloo in Johannesburg at lprinsloo3@bloomberg.netTo contact the editors responsible for this story: John Bowker at jbowker2@bloomberg.net, Thomas PfeifferFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Financial Times
Prosus debut creates €120bn European tech giant
South Africa’s Naspers created a €120bn European tech giant on Wednesday as shares in a Dutch listing of its global internet assets, including a significant stake in China’s Tencent, soared on debut. By valuing Prosus slightly higher than the Tencent stake’s value, the listing has instantly made it Europe’s largest consumer internet company and tackled a valuation quandary for Naspers.
- Simply Wall St.
Is Tencent Holdings (HKG:700) A Risky Investment?
Warren Buffett famously said, 'Volatility is far from synonymous with risk.' So it might be obvious that you need to...
- Reuters
Factbox: Prosus, tech heavyweight with Tencent stake, to list in Amsterdam
* What is Prosus? Prosus, a Latin word that can be translated as "forwards", is a portfolio manager that invests in fast-growing consumer internet companies in developing nations. The new entity's biggest draw is the stake in conglomerate Tencent, the world's biggest videos game company, a social media platform to rival Facebook via its billion-user WeChat app, as well as a payments giant.
