TCEHY - Tencent Holdings Limited
| Previous Close | 42.74 |
| Open | 42.73 |
| Bid | 0.00 x 0 |
| Ask | 0.00 x 0 |
| Day's Range | 42.72 - 42.86 |
| 52 Week Range | 37.37 - 51.24 |
| Volume | 308,019 |
| Avg. Volume | 3,199,876 |
| Market Cap | 410.034B |
| Beta (3Y Monthly) | 1.26 |
| PE Ratio (TTM) | 31.59 |
| EPS (TTM) | 1.36 |
| Earnings Date | N/A |
| Forward Dividend & Yield | 0.26 (0.60%) |
| Ex-Dividend Date | 2019-05-16 |
| 1y Target Est | 51.19 |
- MarketWatch
Prosus increases cash offer for Just Eat to $6.7 billion
Prosus N.V. said Monday that it has increased the cash offer for the entire issued and to-be issued capital of Just Eat PLC to 740 pence a share.
- Zacks
Nintendo Partners Tencent to Boost China Video Game Footprint
Nintendo (NTDOY) enters into partnership with Tencent to sell Switch consoles and gain foothold in China.
- Bloomberg
Tencent-Backed iDreamSky in Talks to Buy Rival Gaming Firm Leyou
(Bloomberg) -- iDreamSky Technology Holdings Ltd. is in exclusive talks to buy rival gaming firm Leyou Technologies Holdings Ltd. for about $1.4 billion, according to people familiar with the matter.iDreamSky, which counts Tencent Holdings Ltd. among its shareholders, is seeking co-investors to help finance the transaction, the people said, asking not to be identified because the deliberations are private. Potential partners could include private equity firms as well as other gaming companies, the people said. The Shenzhen-based firm is working with Credit Suisse Group AG on the deal, they said.Leyou has risen about 16% this year, giving it a valuation of around HK$7.8 billion ($996 million). Shares of IDreamSky have plunged more than 30% since its debut last year, valuing the company at about HK$5.8 billion.There hasn’t been any final decisions as talks are ongoing and the companies could still decide against a transaction, the people said. Representatives for iDreamSky and Credit Suisse declined to comment, while a representative for Leyou didn’t immediately respond to requests for comment.Leyou, listed in Hong Kong in 2011, has developed the free shooting games Warframe and Dirty Bomb. It’s also working with Amazon.com Inc. to co-produce a video game based on the popular fantasy series “The Lord of the Rings.” Other upcoming games are Civilization Online and Transformers.In September, Leyou said that it was holding preliminary talks with potential investors on possible transactions, which may lead to a public takeover. Bain Capital, CVC Capital Partners and KKR & Co. as well as other gaming companies were among bidders for Leyou, Bloomberg News reported last month.Last week, Leyou updated the progress in a filing that its controlling shareholder Charles Yuk had entered into a memorandum of understanding to sell about 69.2% stake to an unidentified potential buyer. The company granted a 21-day exclusivity period to the potential purchaser to conduct due diligence and try to reach a formal agreement.As part of any potential deal, Yuk would acquire the company’s interests in certain offices in the iconic Lippo Centre in Hong Kong and enter into an agreement to provide financing to help develop certain games, according to the filing.iDreamSky, listed in Hong Kong about a year ago, had 57 games including 16 role-playing games on its platform as of June 30, according to its interim report. It has exclusive publishing rights in China for popular titles including Subway Surfers and Temple Run.Michael Chen, its co-founder and chief executive officer, is iDreamSky’s largest shareholder with a 25.92% stake, according to data compiled by Bloomberg. Tencent Mobility, a unit of the Chinese technology giant Tencent, owns about 18.6% as the second-largest holder.To contact the reporter on this story: Manuel Baigorri in Hong Kong at mbaigorri@bloomberg.netTo contact the editors responsible for this story: Fion Li at fli59@bloomberg.net, Jonas BergmanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Bloomberg
SoftBank Opens Institute in Tokyo to Accelerate AI Research
(Bloomberg) -- SoftBank Group Corp. founder Masayoshi Son unveiled a $184 million initiative Friday to accelerate artificial intelligence research in Japan, enlisting Alibaba’s Jack Ma to expound on his goal of commercializing the technology.Son’s company announced a partnership with the University of Tokyo that includes spending 20 billion yen ($184 million) over 10 years by mobile arm SoftBank Corp. to establish the Beyond AI Institute. He roped in the Alibaba Group Holding Ltd. co-founder for an on-campus chat, during which the two billionaires discussed their vision for the future of technology.The institute will support 150 researchers from various disciplines and focus on transitioning AI research from the academic to the commercial using joint ventures between universities and companies. Health-care, city and social infrastructure and manufacturing will be the primary areas of focus, SoftBank Corp. said in a statement. That dovetails with its own goals: in November, SoftBank and Korea’s Naver Corp. said they plan to merge Yahoo Japan and Line Corp. into an internet giant under SoftBank’s control, to combine resources on AI and challenge leaders from Google to Tencent Holdings Ltd.Read more: SoftBank to Create Japan Internet Giant to Battle Global RivalsSon has long advocated AI as the most revolutionary new field of technological development. The Beyond AI Institute marks an investment in accelerating that research on his home turf, where he has previously bemoaned the relative under-performance of Japan’s startup scene. At the same time, he’ll be eager to put behind him a tough 2019 thanks to the calamitous implosion at WeWork and the shrinking values of Uber Technologies Inc. and Slack Technologies Inc.Offering a reminder of his most fruitful investment, Son hosted a talk with Ma, whose online retail empire has been the crown jewel in SoftBank’s investment portfolio. The two exchanged compliments and advocated passion, optimism and world-changing visions as essential to successful entrepreneurship.“In the past 20 years, we’ve been friends, partners and like soulmates in changing people’s lives,” said Son. Ma, in turn, said: “He probably has the biggest guts in the world when doing investment.”In a rare expression of contrition, Son recently said “there was a problem with my own judgment” after the WeWork debacle. He has imposed greater financial discipline on startups since then. On Friday, he said his enthusiasm for grand projects was undimmed. “My passion and dream is more than 100 times bigger than what I am right now. I am still only at the first step to my 100 steps.”To contact the reporters on this story: Vlad Savov in Tokyo at vsavov5@bloomberg.net;Takahiko Hyuga in Tokyo at thyuga@bloomberg.netTo contact the editors responsible for this story: Edwin Chan at echan273@bloomberg.net, Vlad Savov, Peter ElstromFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Benzinga
Riot Games Opens Esports Tourney In Saudi Arabia, Settles Gender Discrimination Suit In US
The move is part of a concerted effort to expand Riot's market in the region. The company is also considering adding Arabic language support for all its products starting next year along with a Middle East version of League of Legends, the company said. Meanwhile, Riot Games has agreed to pay at least $10 million collectively to women who have worked at the company in the last five years to settle a gender discrimination class action suit, according to a report in the Los Angeles Times.
- Benzinga
Big Surprise? 'Fortnite' Was Most Popular Gaming Topic On Reddit This Year
If what gamers are talking about on Reddit is an indication, "Fortnite" was the biggest game story of 2019. According to Reddit's 2019 Year in Review, r/fortnitebr was the top overall game community on Reddit, with two other "Fortnite"-related communities also making the top 100.
- Bloomberg
Lime's Chinese-Made Scooters Get Caught Up in Trump's Trade War
(Bloomberg) -- The scooter-sharing service Lime warned the U.S. government earlier this year of an existential threat to its business. Paying new tariffs on Chinese vehicles would require Lime either to absorb significant new costs, charge customers more or fundamentally reshape its supply chain, the company argued in an official request for an exemption. Choosing any of these options would “stunt Lime’s growth and threaten the survival of its existing services.” Over the last two years, a wave of scooter-sharing companies have emerged, based on the belief that American urbanites are hungry for alternatives to car travel. Their business models also relied on another assumption: that they’d always be able to import large numbers of low-cost vehicles from China. For the San Francisco-based Lime, the Chinese connections ran particularly deep. Brad Bao and Toby Sun, its co-founders, were both born in China, and they sold the startup to investors as a company that maintained a foot in their home country. Having two Chinese founders “who had the relationships, and can set up that operation quickly, was a real advantage,” said Joe Kraus, who invested in Lime in 2018 as a partner at GV, then became Lime’s chief operating officer four months later.President Donald Trump’s aggressive trade policies complicate that story. Countless American companies find themselves stuck in the middle of the competition between the U.S. and China. Markets plummeted on Tuesday after the president indicated he was inclined not to make a trade deal soon—then recovered the following day on signs that a deal could come before American tariffs are set to rise on Dec. 15. Companies have filed about 44,000 requests for tariff exemptions, and about 5,000 have been approved. The U.S. Trade Representative rejected Lime’s request, along with similar ones from Bird Rides Inc. and Uber Technologies Inc. Scooter imports from China to the U.S. this year total nearly $300 million, according to research compiled for Bloomberg by IHS Markit’s Global Trade Atlas. This puts the importers on the hook for about $74 million in tariffs, a significant added expense for the money-bleeding startups that dominate the scooter industry. Lime has raised almost $800 million since its founding in 2017, and investors valued the company at $2.4 billion in its most recent funding round this February. It is close to completing another round of investment that will add hundreds of millions of dollars to its coffers, according to an investor who did not want to be identified discussing private fundraising plans. Bao, who has been Lime’s CEO since May, was more sanguine about trade issues in a recent interview than the company was in its filing earlier this year. “We are not getting unnecessarily nervous,” he said, adding that Lime could be profitable as soon as next year. The company’s calculations rely on improvements to the durability of its vehicles, which Lime attributes largely to its manufacturing expertise. When asked what would happen if Chinese manufacturing receded as a viable option, Bao waved the idea off. “That doesn’t come to our mind,” he said. Yet Lime has already begun to take steps to relieve its exposure to tariffs. The startup imported over 30,000 vehicles in the months before the first round of tariffs went into effect last August, according to Steve Ferreira, CEO of Ocean Audit, which tracks the global movement of goods. Lime’s imports since that time amount to, as Ferreira puts it, “almost zilch.”Like many companies caught up in the trade war, Lime at times had trouble navigating the new landscape. Last year the company, along with a consultant it had hired, misclassified Lime’s scooter imports in a way that resulted in it not paying higher tariffs even after they were implemented, according to three people familiar with the matter. Lime executives later uncovered the practice, and told the government, paying for the tariffs it had avoided. The case is now closed, according to a company spokeswoman. Lime is now considering moving some manufacturing out of China and into Southeast Asia, according to a person familiar with the matter who wasn’t authorized to speak publicly. Kraus described relocating manufacturing capabilities as one of many options the company has to mitigate trade-related risks but declined to say whether it has already begun doing so. “We’ve got plans in place, whether it’s short, mid or long-term,” he said. A spokeswoman later said the company hasn’t moved any operations out of China. Lime’s Chinese connections are a key part of its culture, said people who work there. At its Redwood City, California, office, some employees greet one another and chat in Mandarin. Shelves of scooter helmets clutter the hallways, along with stacks of dried seaweed snacks, and individual packs of Nongshim Shin instant ramen. In the parking lot on a recent Friday afternoon, a man in a Lime helmet waved goodbye and yelled out “zaijian” to his colleagues as he scooted away. Lime likes to see itself as hard-charging even by the standards of tech startups. “As a Chinese company, they move fast,” said Christine Chang, who was senior manager of Lime’s logistics and supply chain operation until this summer. Speaking alternately in Mandarin and English in a recent interview, she said she was drawn to the company because of its Chinese-born founders and Chinese-speaking staff. Bao switches between downplaying and celebrating Lime’s ties to China. “We are born and bred in the U.S.,” he said, pointing out that Lime was founded in California. A few minutes later he argued that Lime was better prepared than its competitors to navigate sensitive international relationships. His Chinese upbringing, he said, “does really help with that.” Bao traces his own entrepreneurship to an ill-fated attempt to sell Nirvana T-shirts on the streets of Wuhan, China, when he was 14. It was the early 1990s, and the band was at the peak of its prominence. Yet, Chinese teenagers didn’t wear band shirts, opting instead for plain t-shirts. The business flopped. The lesson Bao took away, he said, was not to get too far ahead of the market.Bao, 44, moved to the U.S. in 2003 to attend Berkeley’s business school. After graduating, he joined Tencent Holdings Ltd., as the general manager of its U.S. operation. The job came with a $48,000 annual salary and no equity in the company, which is now worth $400 billion. After a stint as an investor, he started Lime in January 2017 with Sun, who he knew through a B-school alumni group. The two men were fixated on the growing Chinese trend of bike-sharing, where companies blanketed city streets with vehicles and let people unlock them with smartphone apps. They thought it’d work in the U.S. There was more interest for bike-sharing than there had been for Nirvana t-shirts in 1990s China, but not much more. Lime only began to look like a huge hit when it added scooters following the sudden success of Bird in late 2017. In the U.S., the main distinctions between Lime and Bird’s product offerings are the color schemes. When Bird and other rivals first launched their scooter-sharing businesses, they used off-the-shelf vehicles, adding their own software and branding. But Lime has always claimed a more sophisticated supply chain operation than its rivals.From the onset, it maintained operations in both China and the U.S. Its business in Shenzhen is run by Adam Zhang, who is described within the company as its third founder. Zhang, who was previously CEO of a Beijing-based e-bike company, is responsible for leading Lime’s Shenzhen team in hardware design, production and supply chain management, according to his LinkedIn profile. About 90 of the company’s 750 employees are currently based in China. The decision to invest in a full-time Asia operation, led by a local manager who understood the complexities of hardware and supply chain operations, was critical to their strategy, said Connie Chan, general partner at Andreessen Horowitz, an early Lime investor.Through its wide network of Chinese manufacturers, Lime was able to seek deeper control from day one, according to Bo Hu, its director of engineering. The company sourced components from various suppliers—a battery from one factory, a controller from another, a motor from a third, said Hu. The custom-made scooters are intended both to develop vehicles with Lime-specific features, and to build longer-lasting vehicles, because the rate of deterioration is one of the major factors determining the economic viability of scooter-sharing companies. “In order to get your vehicles to last a long time, you have to build them from scratch,” said Kraus. (Bird now says it also works with multiple partners to make custom vehicles for its service.) Lime’s manufacturing record hasn’t been spotless. Last year it pulled about 2,000 vehicles from the streets after some began to smolder or even catch fire. The company blamed manufacturing problems related to the battery used by Segway Ninebot, one of its suppliers. Segway Ninebot accused Lime of not properly maintaining its fleet. The two companies stopped working together shortly thereafter. Lime currently works with at least three Chinese manufacturers, including Dong Guan Honglin Industrial Co., according to two people with direct knowledge of Lime’s operations. Replacing these relationships with new ones outside of China would come with at least short-term spikes in cost, according to Chang, the former supply chain manager. Even if Lime did move manufacturing facilities to a country like Vietnam, it would likely have to ship raw materials from China, or source locally. Lime would also lose the benefit of its experience in China. “When you go to another country, they have a lot of quality issues, manufacturing issues,” said Chang. Lime’s decision to stock up ahead of the tariffs is also leading to a new liability in the coming months. The company maintains at least a dozen warehouses across the U.S., where it keeps unused vehicles overnight, or for longer stints, according to Chang. At times there have been tens of thousands of scooters sitting in storage, according to two people familiar with the company. Storage capacity can be stretched in the winter in cold-weather cities, when many of Lime’s scooters enter a state of semi-hibernation. All those tariff-free scooters Lime bought in last year will have to go somewhere, and warehouse space isn’t free. \--With assistance from Mark Niquette.To contact the author of this story: Candy Cheng in San Francisco at ccheng86@bloomberg.netTo contact the editor responsible for this story: Joshua Brustein at jbrustein@bloomberg.netFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Financial Times
Nio is nuts, where’s the cash?
Nio was meant to be China’s Tesla killer. Backed by a host of well known investors including Tencent, Baillie Gifford and Sequoia Capital, the electric car company was seemingly China’s chosen one to disrupt Elon Musk’s grip on one of the sector’s few remaining growth markets. The problems started from its listing: after targeting a raise of $1.8bn, Nio only managed to garner $1bn from investors at a share price of $6.26.
- Reuters
REFILE-China video streamer iQiyi sees price hikes at home, gold abroad
Chinese video streaming company iQiyi hopes to have as many as half its subscribers in overseas markets in five years despite Sino-U.S. trade tensions and increased government censorship at home, founder and chief executive Gong Yu told Reuters in an interview. The company, China's answer to Netflix, has its sights set on Southeast Asia, where it is signing marketing deals with local partners. It also working to sell white-label versions of its streaming platform around the world, Gong said in a presentation at the Asia TV Forum in Singapore.
- Bloomberg
Nintendo Finally Brings Switch to Tough Chinese Market
(Bloomberg) -- Tencent Holdings Ltd. and Nintendo Co. announced they’ll begin selling the Switch console in China Dec. 10, a long-anticipated entry into the world’s biggest gaming arena.Nintendo’s signature device will sell for 2,099 yuan ($297), about the same as elsewhere around the world. Mario Kart 8 Deluxe and Mario Odyssey will join the already-greenlit Super Mario Bros. U Deluxe among the first crop of Switch titles in the coming weeks. Nintendo is also preparing to introduce the Switch Lite -- a cheaper version of the console intended to boost the device’s mainstream appeal -- to China at a future date, development partner Tencent said in a social media post Wednesday.But for all the name recognition, marketing muscle and fan enthusiasm behind it, Nintendo’s Switch is unlikely to get off to a fast start in the world’s largest gaming market.The Switch’s impending release in China has excited Nintendo investors hopeful of tapping a new market. Yet it’s constrained by the rise of smartphones as the dominant gaming platform in China, and by the reluctance of gamers to buy consoles via official channels because of their limited range of Beijing-approved games.Nintendo’s Switch retains its global popularity three years after its international launch, in an industry where consoles are often revamped every half-decade or so. Getting into China could extend its longevity, though Nintendo’s first issue is that many fans in China who might have wanted and could afford a Switch are likely to already have one.“Nearly 10% of Nintendo Switch sales are from the Asia market, excluding Japan, with Mainland China accounting for a notable portion via grey market shipments,” said Daniel Ahmad, gaming industry analyst at Niko Partners. “Demand for Nintendo Switch hardware and software has been strong in China prior to the official launch.”Read more: Nintendo Will Prove the Switch’s Longevity This Holiday SeasonAt the packed Switch booth in August during ChinaJoy -- the country’s biggest gaming show -- fans waited as long as two hours to try marquee titles like The Legend of Zelda: Breath of the Wild. Many in line brought their own Switch -- whether acquired overseas or on the gray market -- and just wanted to check whether the Chinese versions of their favorite games would be any different due to censorship.Worries about Tencent’s potential influence on Nintendo’s content are not unfounded. Two of the Chinese internet giant’s recent hits have been patriotic versions of SimCity and PlayerUnknown’s Battlegrounds, and it has also imposed strict playtime limits on minors -- all in an effort to appease Beijing. Nintendo, for its part, has said that its games are designed for the family and shouldn’t have trouble with regulators.“The Chinese government often changes the regulations,” said Tomoaki Kawasaki, an analyst at Iwai Cosmo Securities Co., warning about the unpredictability of a regime that earlier this year granted Tencent approval to distribute Super Mario Bros. U in the country.“We have always been developing game consoles that parents can rest assured to let their children play, that are family-friendly, and that are highly praised by parents,” Nintendo Senior Executive Officer Satoru Shibata said at ChinaJoy.Read more: Tencent Teams Up With Nintendo-Backed Pokemon to Create GamesThis isn’t Nintendo’s first attempt to crack the market. Official console sales in China remain a fraction of the overall gaming arena, as region locks and delayed hardware releases push gamers toward imported options. Nintendo confronted similar challenges in attempts to enter China dating back to 2003. It tried to sell, via a joint venture, its Game Boy Advance, Nintendo 3DS and a peculiar China-only portable console called iQue Player. Rampant piracy and slow game launches made those products unappealing.The rise of smartphone gaming places a new obstacle in Nintendo’s path, as the Japanese company will have to convince players to carry yet another handheld gadget. Its library of first-party franchises like Super Mario will help, though China already has an inventory of copycat titles -- Let’s Hunt Monsters, a commercially successful Pokemon Go clone, was authored by partner Tencent.Nintendo will now be hoping to lean on its partner’s local expertise. Tencent’s ability to reach a billion-plus users via its WeChat messaging service and established partnerships with developers all have analysts more optimistic about Nintendo’s longer-term prospects.“Tencent is working closely with third parties, including Chinese indie developers, to build up a library of high quality titles that will increase the appeal of the console in China,” said Ahmad. IDC analyst Yexi Liao agreed: “At the moment, Nintendo is getting a greater benefit from the deal as it will finally be able to penetrate the biggest gaming market in the world.”For Nintendo and Tencent, selling Switch consoles in China is just one component of a partnership that’s ratcheting up. The two are reported to be working together on games for the U.S. as well as China, and Tencent this summer announced a collaboration with the Nintendo-backed Pokemon Co. The social media titan on Wednesday said it’s working to localize Zelda and the Pokemon Let’s Go titles, while teaming with global studios and developers to bring more third-party Switch titles to the country.For now, the Japanese company “does not count on business in China,” said Kazunori Ito, an analyst at Morningstar Investment Services in Tokyo. “Nintendo needs to get know-how for selling games in China” and is widely deemed to have chosen a good partner in Tencent instead of trying to go it alone.(Updates with analyst’s comment from the sixth paragraph)\--With assistance from 院去信太郎 and Takashi Amano.To contact the reporters on this story: Zheping Huang in Hong Kong at zhuang245@bloomberg.net;Yuki Furukawa in Tokyo at yfurukawa13@bloomberg.net;Vlad Savov in Tokyo at vsavov5@bloomberg.netTo contact the editors responsible for this story: Peter Elstrom at pelstrom@bloomberg.net, Vlad Savov, Edwin ChanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Bloomberg
Billionaires Investing in China Electric Cars Face Shakeout
(Bloomberg) -- Some of China’s wealthiest tycoons steered billions of dollars into electric-car companies in order to fuel the country’s dreams of becoming a leader in the field. Now a reckoning may be looming as car sales slow and the government reduces subsidies for the nascent industry.That leaves the flagship companies of Jack Ma, Pony Ma, Hui Ka Yan and Robin Li facing an increasingly steep path to profitability on their bets that electric vehicles can be smartphones-on-wheels connecting passengers to other businesses. Their capital, along with dozens of startups raising $18 billion, helped inflate an electric bubble that now looks to be in danger of popping.China’s car market is experiencing a prolonged sales slump, prompting EV makers to slash earnings outlooks. With China considering further cuts to the subsidies for consumer purchases in order to force automakers to compete on their own, a shakeout is looming that not even the tycoons’ support may be able to prevent, said Rachel Miu, an analyst with DBS Group Holdings Ltd. in Hong Kong. “For the new kids on the block in the EV space, it’s a steep uphill climb,” she said.Here’s what China’s richest people have to show for their companies’ EV investments:Alibaba: Xpeng Coupe, AccusationsJack Ma stepped down as chairman of Alibaba Group Holding Ltd. in September after amassing a $40 billion-plus fortune, but China’s richest man retains his board seat -- and influence -- at the e-commerce emporium he created. Alibaba has participated in several funding rounds for Guangzhou Xiaopeng Motors Technology Co., or Xpeng Motors, including one in 2018 that raised 2.2 billion yuan ($313 million) for the carmaker co-founded by former Alibaba executive He Xiaopeng.Xpeng launched its first vehicle, the five-seat G3 SUV, last year and has sold 11,940 vehicles so far this year, according to data compiled by Bloomberg.The company, founded in 2014, also is teaming up with more-established automakers. A factory built with Haima Automobile Co. can produce 150,000 EVs annually. Another should soon begin assembling the P7 coupe, scheduled to begin deliveries next year.The journey hasn’t been without controversy, though, as some engineers bound for Xpeng stand accused of stealing from their ex-employers in the U.S. In March, Tesla Inc. sued a former engineer, alleging he uploaded files, directories and copies of source code to his personal cloud storage account before resigning. Also, a former Apple Inc. engineer was indicted last year for allegedly pilfering self-driving car secrets on his way to an Xpeng job. His trial is upcoming.Xpeng wasn’t accused of wrongdoing.“We are very adamant that we pursue our own R&D,” President Brian Gu said. “Copyright is very important to us.”Hangzhou-based Alibaba, the second-largest shareholder in Xpeng, didn’t answer specific questions about the automaker.Xiaomi Corp., the consumer-electronics company, participated in another $400 million fundraising round, the automaker said Nov. 13.Tencent: NIO Lists, Then CutsPony Ma’s Tencent Holdings Ltd., whose WeChat messaging app helped make him China’s second-richest person, led a $1 billion investment round in NIO Inc. in 2017. With more than 26,000 vehicles sold, NIO’s one of the few Chinese startups making multiple models, and it beat rivals with an initial public offering in New York last year.But losses piled up with the overall sales slump and as the company, which has been described as “China’s Tesla,” plowed money into marketing and real estate. It sponsored a Bruno Mars concert and opened luxury clubs for NIO owners that feature showrooms, coffee bars and performance spaces. By August the company had opened 19 NIO Houses over 22 months, and combined rental expenses were equivalent to 6.3% of revenue during the 12 months ended March, according to Bloomberg Intelligence.“NIO chooses the direct sales mode and pays great attention to user experience,” the company said. It doesn’t plan to close its existing clubs -- or open new ones.NIO lost $2.8 billion in the 12 months ended June on revenue of $1.2 billion, and its shares have plunged this year. The Shanghai-based company cut about 20% of its workforce through September. Separately, NIO has said that Tencent and Chief Executive Officer William Li planned to inject $100 million each into the company, though the carmaker hasn’t clarified whether the investment has been completed.“Our sales have been under pressure since the subsidies went down,” Li said. “It has come to a new era that one can only win customers with quality products and services.”Shenzhen-based Tencent expressed support for EVs but didn’t answer specific questions about NIO.Evergrande: High HopesOne of the more startling entrants in the EV industry is property developer China Evergrande Group, which declared it wanted to be the world’s biggest manufacturer within three to five years. That means surpassing Tesla, which just opened a factory in Shanghai. Between September 2018 and June 2019, Evergrande invested more than $3.8 billion in EV-related companies, according to Bloomberg Intelligence, and will start producing its Hengchi brand next year.Evergrande, which wants to open 10 production bases, plans to spend 45 billion yuan on new-energy vehicles between 2019 and 2021. On Nov. 10, a unit announced it would spend almost $3 billion to boost its stake in National Electric Vehicle Sweden AB to 82% from 68%.Billionaire chairman and founder Hui Ka Yan, who’s diversifying into businesses such as soccer and health care, acknowledged there isn’t much overlap between Evergrande’s real-estate business and its EV ambitions.“We don’t have any talent, technology, experience, or production base in manufacturing cars,” Hui said. “How can we compete with the century-old automakers in the world?”His answer: by opening Evergrande’s wallet.“Whatever core technology and company we can buy, we will buy,” he said.Yet Hui’s whatever-it-takes strategy may take a toll on Evergrande because of the cash-burning nature of NEV investments. The company’s forecast of spending 45 billion yuan is probably an underestimate, and that may exacerbate its cash crunch, according to BI.“This could crimp its home-sales margin given an urgency to sustain price cuts to boost cash collection from sales,” analyst Kristy Hung said in a Nov. 22 report.Baidu: WM Factories, LawsuitRobin Li, the CEO of China’s dominant internet search-engine company, made WM Motor Technology Co. part of Baidu Inc.’s move into autonomous driving. Baidu led a fundraising round this year that generated 3 billion yuan for the Shanghai-based automaker. Baidu owns a 13% stake.WM rolled out an electric SUV last year and has delivered more than 19,000 vehicles, Chief Strategy Officer Rupert Mitchell said. So far this year, WM sold 14,273 of its battery-powered SUVs, according to data compiled by Bloomberg. That puts WM behind market leader BYD Co. -- backed by Warren Buffett -- and NIO, but ahead of Xpeng. WM launched a second SUV model on Nov. 22.WM has an advantage over rivals started by employees from internet companies, Mitchell said. Founder Freeman Shen used to run Volvo Car Group in China.“We are not moonlighters from the technology industry that are having a crack at mass-market automotive,” he said.Volvo parent Zhejiang Geely Holding Group has sued WM, seeking 2.1 billion yuan compensation for alleged copyright infringement, Chinese state media reported in September. WM has denied wrongdoing.WM is producing vehicles at fully owned factories, which helps maintain quality control, Mitchell said. The company, which is opening a second factory next year that can make 150,000 vehicles annually, wants to raise another $1 billion, Mitchell said.Baidu declined to comment.(Updates 16th paragraph to clarify status of NIO investment)\--With assistance from Emma Dong, Tian Ying and Gao Yuan.To contact Bloomberg News staff for this story: Bruce Einhorn in Hong Kong at beinhorn1@bloomberg.net;Chunying Zhang in Shanghai at czhang714@bloomberg.netTo contact the editors responsible for this story: Young-Sam Cho at ycho2@bloomberg.net, ;Emma O'Brien at eobrien6@bloomberg.net, Michael TigheFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Reuters
Nintendo to launch Switch in China on Dec. 10 priced $300
TOKYO/BEIJING (Reuters) - Japan's Nintendo Co Ltd said on Wednesday it will officially launch its Switch gaming console in mainland China on Dec. 10 priced 2,099 yuan ($298) with local partner Tencent Holdings Ltd. Pre-orders for the console began at noon (0400 GMT) in China on Wednesday, opening a major front in Nintendo's drive to expand the reach of the home-portable Switch device beyond a core fanbase as it heads into the key shopping season. The launch, which aims to establish Nintendo's control over China's grey market for the device, includes popular game New Super Mario Bros U Deluxe and a one-year warranty.
- Moody's
JD.com, Inc. -- Moody's assigns Baa2 to JD.com's proposed senior notes; outlook positive
Moody's Investors Service has assigned a Baa2 senior unsecured rating to the proposed USD notes to be issued by JD.com, Inc. (Baa2 positive). Moody's expects the notes will have limited impact on JD.com's net cash position and debt leverage, given the company's track record of solid profitability and growing operating cash flow. Moody's expects JD.com's planned capital spending and investments will be adequately covered by its cash reserves and estimated operating cash flow of around RMB20 billion-RMB25 billion ($2.9 billion-$3.6 billion) over the next 12 months.
- Bloomberg
JPMorgan Fund Cuts Tencent as Slowdown Hampers Comeback
(Bloomberg) -- A top-performing JPMorgan fund focused on emerging-market stocks trimmed its bet on Tencent Holdings Ltd., selling shares of what was its largest holding in July as the Chinese technology company struggles to stage a comeback.JPMorgan Chase & Co.’s $6.5 billion Emerging Markets Equity Fund, which outperformed 94% of peers this year, reduced its position in Tencent by 14% as of Oct. 31, data compiled by Bloomberg show. Shares of Tencent, the largest company in Hong Kong’s Hang Seng Index by market capitalization, fell to a nine-month low on Oct. 30. JPMorgan declined to comment.Tencent has been trying to recover from 2018 losses after a nine-month Chinese freeze on game approvals gutted its most profitable business last year. Yet the stock dropped 16% in U.S. dollar terms from an April high as China’s economic slowdown weighed on efforts to revive growth. Even so, 50 of the 57 analysts tracked by Bloomberg recommend investors buy the stock.While trimming its Tencent exposure, its fifth-biggest holding, the JPMorgan fund boosted wagers on Budweiser Brewing Company APAC Ltd., ITC Ltd. and Bank Rakyat Indonesia Persero Tbk PT, the data show. The fund also added 2% to its position in Alibaba Group Holding Ltd., currently its top holding.(Updates to add chart)\--With assistance from Sofia Horta e Costa and Stephen Tan.To contact the reporter on this story: Andres Guerra Luz in New York at aluz8@bloomberg.netTo contact the editors responsible for this story: Carolina Wilson at cwilson166@bloomberg.net, Alec D.B. McCabe, Philip SandersFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Moody's
Playtika Holding Corp. -- Moody's downgrades Playtika's CFR to B1 on revised proposed financing terms, outlook stable
Moody's Investors Service ("Moody's") downgraded Playtika Holding Corp.'s ("Playtika") Corporate Family Rating (CFR) to B1 from Ba3 and also downgraded its Probability of Default Rating (PDR) to B1-PD from Ba3-PD in connection with revised terms for the company's proposed $2.5 billion first lien term loan B. Elevated pricing for the term loan and increased original issue discount and transaction costs are expected to increase the company's pro forma interest expense by $50 million annually and reduce opening cash balances by approximately $37 million. The resulting reduction in free cash flow and opening liquidity reduces Playtika's expected financial flexibility over the next 12-18 months as the company executes on its M&A driven growth strategy and debt repayment plans.
- Investor's Business Daily
Is Baidu Stock A Buy Right Now? Here's What BIDU Stock Chart, Earnings Show
Baidu controls 75% of internet search in China but it's looking for new avenues of growth. Here is what the fundamentals and technical analysis say about buying BIDU stock now.
- InvestorPlace
Is IQiyi Stock Still Worth Betting On?
IQiyi (NASDAQ:IQ) stock opened Dec. 2 trying to hold the bounce it got from the company's recently reported third-quarter earnings.Source: NYC Russ / Shutterstock.com The Chinese streaming media company beat estimates with a loss of $516 million, 70 cents per share fully diluted, on revenue of $1 billion.Membership revenue, however, was up 30%, to $520 million. There was also a 12% gain in "other," mainly video game revenue from licensing titles to a company called Skymoons. The problem was in ad revenue, which was down on softening consumer markets. The company's conference call, however, set big plans to offer content on regular TVs, in theaters and through Virtual Reality, not just through mobile phones.InvestorPlace - Stock Market News, Stock Advice & Trading TipsIQiyi has analysts pounding the table for IQ stock and I've been bullish on it myself. IQ Stock: More YouTube Than NetflixIQiyi is a bet on the "New China," a high-tech consumer culture with unlimited potential. If your image is of "Communist China," the oppressive one-party state threatening America on every side, you don't want to invest in IQ.While it's sometimes called the "Netflix (NASDAQ:NFLX) of China," IQiyi is more like China's YouTube, only with a highly proprietary twist. * 7 5G Stocks to Buy Now for the Future Like the Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) video unit, iQiyi rides on its parent's content delivery system, hosts in its cloud and shares its technology obsessions, in this case, faith in Artificial Intelligence. It also hosts the social media content around its shows. Unlike YouTube, however, iQiyi owns most of its own content and can fully monetize it in games and merchandising.Parent Baidu (NASDAQ:BIDU), retains a 48% stake in iQiyi. IQiyi is in a tight race for market leadership with units of Alibaba (NYSE:BABA) and Tencent Holding (OTCMKTS:TCEHY).Baidu, however, is no Google. Baidu has been a terrible investment, the shares down 48% over the last five years. That's why ancillary units like IQ were spun out. Baidu also reported a strong third quarter, however. Betting on YuIQiyi was founded in 2010 by Tim Gong Yu. If you're betting on iQiyi today, you're betting on him. He sees the Chinese market as completely unlike that of the West -- far more volatile. He sees opportunities in locally produced films that, like Netflix's The Irishman, go first into cinemas and then online.IQiyi also runs its movies through an AI analysis on genre, characters, story arc and target audience before final changes are made and the film is released. Rather than just analyzing what people watch, iQiyi tries to figure out who will watch its movies before releasing them.The IQ programs that Gong Yu greenlights are mostly high-touch games, soap operas and adventure stories the company holds full title to. IQ creates its own programming ideas, executes them and holds rights to everything inside them. * 10 Buy-and-Hold Stocks to Own Forever IQiyi has 105.3 million subscribers or members, but also sells ads. It is in a race with rivals to penetrate smaller "third-tier" cities where consumers have more time than money, and to expand internationally. It recently signed a strategic partnership covering Malaysia. The Bottom Line on IQ StockTo believe in iQiyi stock, you must first believe in China as a large consumer market with an expanding geographic horizon.Seen in that light, Tim Gong Yu is a good man to bet on. He has full control over his content, a good understanding of his market and access to leading-edge technology. As a spinoff rather than just a unit manager, he is also fully in charge.Even for younger investors, this is a speculation. IQ is a stock you put some of your "mad money" on; money you can afford to lose. If the world blows up, you're toast, but if it doesn't, you could win big.Dana Blankenhorn is a financial and technology journalist. He is the author of the environmental story, Bridget O'Flynn and the Bear, available at the Amazon Kindle store. Write him at danablankenhorn@gmail.com or follow him on Twitter at @danablankenhorn. As of this writing, he owned shares in BABA. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Things to Watch for into 2020 for Safer Income & Growth * 7 Entertainment Stocks to Buy to Escape Holiday Blues * 5 "Strong Buy" Biotech Stocks With More Than 80% Upside The post Is IQiyi Stock Still Worth Betting On? appeared first on InvestorPlace.
- Moody's
Naspers Limited -- Moody's assigns Baa3 issuer rating to Prosus N.V. and (P)Baa3 to its proposed GMTN Program; ratings on Naspers withdrawn
Moody's Investors Service ("Moody's") has today assigned a Baa3 long-term issuer rating to Prosus N.V. ("Prosus") and a (P)Baa3 rating to its proposed $6 billion Global Medium Term Note (GMTN) Program, which Prosus is establishing to facilitate future bond issuances. Moody's has also affirmed the Baa3 ratings on the existing bonds issued by Prosus (formerly Myriad International Holdings B.V.).
- Bloomberg
Mobile Games and Ronaldo Make 39-Year-Old a Billionaire
(Bloomberg) -- Singapore’s newest billionaire is a former government employee who rode mobile sensation Free Fire into the ranks of the ultra-wealthy this week.The battle royale or fight-to-the-death title distributed by Sea Ltd. ranked among the five most downloaded games on the Apple and Google app stores for three straight quarters this year and has amassed $1 billion in adjusted revenue since launching in 2017. That propelled a tripling in Sea’s market value and the fortune of co-founder Gang Ye, a Carnegie Mellon University alum who’s worked for Wilmar International Ltd. and Singapore’s Economic Development Board.The 39-year-old joins fellow co-founder Forrest Li, whose larger stake in the fast-growing games-to-shopping company earned him a ten-digit fortune earlier this year. Ye, who moved to Singapore from China in the 1990s as a teenager and became a citizen shortly after his return from the U.S., has served as Sea’s chief operating officer since 2017.The executive holds an 8.4% stake in the company and is worth $1 billion, according to the Bloomberg Billionaires Index. A company representative declined to comment on his net worth.Read more: Singapore’s Sea Surges Most in Six Months After Hiking OutlookShares in the company, which is part-owned by Chinese social media titan Tencent Holdings Ltd., reached a record on Wednesday after Sea reported a tripling in revenue to $610.1 million in the third quarter. The shares have risen 234% this year.Read more: The Tencent of Southeast Asia Isn’t Really Like Tencent at AllWhile gaming is Sea’s biggest business, e-commerce platform Shopee is also growing fast. The segment’s revenue more than tripled in the quarter, helping narrow net losses to $206 million. Sea’s dependence on the success of “just a few game titles” was listed as one of its business risks in a 2018 annual report.Shopee, whose television and online ads feature Juventus soccer star Cristiano Ronaldo, topped the mobile shopping category in Southeast Asia by monthly active users and downloads in the third quarter, according to researcher Iprice Group. While an influx of e-commerce giants from Alibaba Group Holding Ltd. to Amazon.com Inc. onto Sea’s turf has sparked concerns over its growth, the company has a “firm lead in the region that’s tough to break,” Bloomberg Intelligence analyst Matthew Kanterman wrote in November.Ye and Li are the latest billionaires to emerge from the gaming scene. Tim Sweeney, founder of Fortnite maker Epic Games, has a $7.2 billion fortune while Gabe Newell -- whose Valve Corp. operates the Steam platform -- has a net worth of $5.7 billion, according to Bloomberg’s ranking.(Updates with Sea’s share performance in the fifth paragraph)\--With assistance from Tom Metcalf and Pei Yi Mak.To contact the reporters on this story: Yoojung Lee in Singapore at ylee504@bloomberg.net;Yoolim Lee in Singapore at yoolim@bloomberg.netTo contact the editors responsible for this story: Pierre Paulden at ppaulden@bloomberg.net, Edwin ChanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Barrons.com
Alibaba Had a Strong Hong Kong Debut. HSBC Says the Stock Is Still a Buy.
Analyst Binnie Wong says the e-commerce company is likely to outstrip its peers in terms of revenue growth and sustainable profits.
- Bloomberg
Investors in China Can't Wait to Finally Own Alibaba Shares
(Bloomberg) -- Most mainland investors can still only watch gains in Alibaba Group Holding Ltd., as China’s most valuable listed company extends increases after its Hong Kong stock exchange debut.Fund mangers say the shares will be a must-have once they are included into the city’s trading links with the mainland, timing of which remains uncertain. The industry is unfazed the company’s U.S.-listed equity has nearly tripled in price since September 2014’s initial public offering, predicting that Chinese investors’ familiarity with the e-commerce firm will push Alibaba’s market valuation higher still.“It’s a unique and rare asset -- like Tencent and Meituan -- that can’t be found in mainland-listed stocks,” said Qu Shaohua, managing director at Acroguardian Investment Co. “Though we don’t own Alibaba shares yet, I think it’s important that we do once it becomes available through the stock connect -- at the right price.”The stock is eligible to join the Hang Seng Composite Index, of which many components can be traded through Chinese exchanges’ trading links with Hong Kong’s. But due to Alibaba’s unequal voting rights structure, its shares must trade for some seven months in Hong Kong and meet other requirements in areas like trading volume before being included into the stock connect, according to rules published by the Shanghai and Shenzhen stock exchanges.The mainland bourses didn’t immediately reply to faxes, calls and emails seeking comment on Alibaba’s eligibility for the stock links.Jiang Liangqing, a fund manager at Ruisen Capital Management in Beijing, has Alibaba high on his shopping list and expects other institutional investors to add the stock as an “essential part” of their portfolio, just like they did with Tencent Holdings Ltd. when its shares traded in the city became accessible to mainland investors a few years back.Alibaba finished up 3% on Wednesday at HK$193.2, after gaining 6.6% on its debut. The closing price was around 25 times projected earnings for the next 12 months, versus Tencent’s 26 times and Meituan Dianping’s 117 times.The company is not totally strange to Hong Kong’s stock market. Business-to-business marketplace Alibaba.com Ltd. was floated there in 2007, but Alibaba bought back the shares five years later at the IPO price.The parent company then went public in New York in 2014 after being turned down by Hong Kong. It has created more than $250 billion in wealth for investors since its IPO.Many mainland China traders say they are not fretting about missing out on the gains, instead projecting optimism that domestic investors -- who shop, order takeout and get groceries delivered through Alibaba’s services on a regular basis -- will give its Hong Kong stock a lofty valuation over time.“Mainlanders are going to go crazy over this one, when they can finally buy a piece of Alibaba with yuan,” said He Qi, a fund manager at Huatai Pinebridge Fund Management whose mandate includes Hong Kong shares.One of the latest Chinese technology firms to be eligible for trading by Chinese investors through the link with Hong Kong’s stock exchange, Meituan was the most net-purchased stock by mainland investors in the two weeks following its stock connect inclusion in late October, according to figures compiled by Bloomberg.To be sure, some traders aren’t in a rush to jump on the Alibaba bandwagon, highlighting risks such as China’s still-slowing economic growth.“Alibaba is faced with heightened competition, both on its home turf of e-commerce and in the booming short video realm,” added Wei Hai, chief investment officer at Jungle Gene Associates. The hedge fund holds a position in U.S. stocks.(Updates with stock close seventh paragraph.)\--With assistance from Jeanny Yu, Lujia Yu and Mengchen Lu.To contact Bloomberg News staff for this story: April Ma in Beijing at ama112@bloomberg.net;Ken Wang in Beijing at ywang1690@bloomberg.netTo contact the editors responsible for this story: Sofia Horta e Costa at shortaecosta@bloomberg.net, Fran Wang, Kevin KingsburyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
