|Bid||0.00 x 0|
|Ask||0.00 x 0|
|Day's Range||42.56 - 43.17|
|52 Week Range||31.54 - 51.24|
|Beta (3Y Monthly)||1.34|
|PE Ratio (TTM)||31.56|
|Forward Dividend & Yield||0.26 (0.59%)|
|1y Target Est||54.06|
Activision Blizzard's (ATVI) upcoming Call of Duty: Mobile is expected to provide it a competitive edge in the crowded mobile games space.
SHENZHEN, China/SHANGHAI (Reuters) - Tech giant Tencent Holdings Ltd plans to leverage its strengths in video games and social media to grab market share in China's burgeoning cloud computing sector from incumbent Alibaba, the head of its cloud unit told Reuters. Tencent is best-known for its WeChat messaging app and a suite of popular games but is aiming to expand into business services as consumer internet growth slows and companies shift number-crunching from their own computers to the cloud. "I think we can start from where we have advantages," said Senior Executive Vice President Dowson Tong in his first interview with international media since he took charge of Tencent's Cloud and Smart Industries Group.
“Mustn’t pry” is not a phrase much uttered by Chinese officials. The real surprise is the refusal of Tencent and Alibaba to help. The People’s Bank of China launched credit scoring agency Baihang last year with grand plans to overtake Tencent’s and Alibaba’s platforms.
(Bloomberg Opinion) -- Singapore is a major Asian refining hub, though it doesn’t have a drop of crude petroleum. Now, the tiny country is punching above its weight in data. The upshot for investors: An asset class that pays 51% in a world where earning even zero is increasingly a luxury.There’s a limit to how many bits and bytes even a busy financial center of 5.6 million people can produce. Yet, measured by power supply, Singapore is now the world’s largest repository for storing and processing data. Facebook Inc. alone is setting up an 11-story facility, its first such custom-built center in Asia. Data-center real-estate investment trusts, or landlords who take money from public shareholders to own and manage server farms for rent-paying tech clients, are now a globally popular investment. Singapore has unique attractions. Some are technical, such as low-latency connectivity. Another is that its investors are wealthy and old. Assured returns today excite them more than uncertain growth tomorrow. If global tech is a gold rush, Singaporeans are happy to pour money into the picks and shovels.Consider two current deals. Keppel DC REIT, which is seeking a combined S$478.2 million ($347.8 milion) from a private sale of shares and a preferential issue, saw the placement fully covered within the first hour of bookbuilding at the top of the price range. Shares have risen 44% over the past year. Including dividends, the returns have been 51%. Keppel DC will use the newly raised funds to expand its portfolio to S$2.58 billion, spread across 17 data centers globally.A world awash in cash helps boost the attractiveness of REIT dividends for small savers who would otherwise have to lunge for risk to earn decent yields. Not surprisingly, Mapletree Industrial Trust increased the size of its private placement to S$400 million after it was covered 6.3 times. The Singapore REIT, which wants to acquire data centers in North America, has handed 30% returns to investors over the past year. Will the good times last? Singapore has its drawbacks. The island became the “Houston of Asia” because it had a deep-water seaport and a large rig-building industry.The oil of the 21st century is a different industry. Data travels along copper wires and gets stored in micro-thin wafers of metal compounds, which have a tendency to heat up. The ideal storage center would be in a place where the electricity consumed in keeping servers cool isn’t as high as in tropical Singapore. Every watt of power that goes into computing as much as 0.78 watts has to be set aside to beat the year-round heat and humidity.Neither does it help that real estate is scarce. Even with land reclaimed from the sea, Singapore remains smaller than Rhode Island.Still, Singapore’s long-term advantage comes from being tiny, especially if Hong Kong founders as a rival.Sprawling data centers in China’s Inner Mongolia, as well as India or Indonesia, will primarily serve domestic digital content and commerce. They’ll also be fraught with politics. Populous countries will insist on being able to trace their citizens’ online behavior in the name of national security. Localization is one price global tech firms will have to pay to access these sizable markets. With New Delhi weighing a law that would make local storage mandatory, mining tycoon Gautam Adani wants to invest $10 billion in server farms in just one state. He’s waiting to sign up the likes of Amazon.com Inc. and Google. Alphabet Inc.’s Google, which has no data centers in China, has been in talks with Tencent Holdings Ltd. and several other Chinese firms to bring in its cloud services. However, in China’s case, an additional complication is the trade war. It’s not clear if Alphabet’s plans to offer Google Drive and Google Docs on the mainland will proceed apace amid increasing scrutiny by a hawkish establishment in Washington.Singapore, run by the same political party since 1959, offers predictable rule of law and infrastructure to give tech companies a comfort level for storing their most valuable resource. On land costs alone, neighboring Malaysia would be cheaper. But when deciding to set up a data center, investors assign a far bigger weight to future risks. And that’s where small, stable Singapore earns its big payoff.To contact the author of this story: Andy Mukherjee at firstname.lastname@example.orgTo contact the editor responsible for this story: Patrick McDowell at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Andy Mukherjee is a Bloomberg Opinion columnist covering industrial companies and financial services. He previously was a columnist for Reuters Breakingviews. He has also worked for the Straits Times, ET NOW and Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
Take Two Interactive's (TTWO) upcoming NBA 2K20 Global Championship is expected to boost its competitive prowess in the rapidly growing esports space.
Alibaba (NYSE:BABA), like many Chinese stocks, has been volatile in 2019, mostly due to trade war concerns. Still, BABA stock has added more than 30% so far this year.Yuan, the Chinese currency has also depreciated considerably versus the U.S. dollar, and reports of a potential cooling of the Chinese economy well into 2020 have added to the recent uncertainty surrounding Alibaba shares.InvestorPlace - Stock Market News, Stock Advice & Trading TipsAlibaba stock and other Chinese names may undergo further volatility and profit-taking in the coming weeks. However, investors with a two- to three-year horizon may consider investing in Alibaba shares, especially as the company gets closer to report earnings on Nov. 1. Here is a deeper look at the longer-term prospects of BABA stock. BABA Stock and eCommerce LeadershipAlibaba's current share of the Chinese eCommerce space is almost 60%, and about 87% of its total revenue comes from eCommerce.The group operates through three main eCommerce sites -- Taobao, a Chinese online shopping website, Tmall, a Chinese-language website for business-to-consumer online retail, and Alibaba.com, the group's international trade site. * 7 CBD Stocks to Buy That Are Still Worth Your Investment Dollars The three sites have hundreds of millions of users globally and host millions of businesses. BABA's mobile monthly active users (MAUs) on its eCommerce platforms now tops 755 million.Alibaba has recently announced the acquisition of Kaloa, the eCommerce platform of China-based NetEase (NASDAQ:NTES) for $2 billion. Kaloa currently provides Chinese consumers with imported merchandise, 'western' brands, as well as personal and household items, such as skin care, cosmetics and baby products.Tmall Global and Kaola are China's largest and second-largest cross-border eCommerce platforms, respectively. Therefore two combined platforms are likely to surpass rivals in China.Many analysts believe that Alibaba's bottom line is not going to be too adversely affected by current trade wars as its business model is tied to China directly, decreasing the long-term risks of bi-party trade wars.In fact, on Aug. 15, when Alibaba released quarterly earnings, the results exceeded analyst estimates in both revenue and earnings. BABA stock's revenue increased 42% annually to 114.9 billion RMB ($16.7 billion). It topped estimates by about $880 million.Strength in numbers was in part due to Alibaba's core commerce business where revenue rose 44% year-on-year in the June quarter.According to the quarterly report, annual active consumers on retail marketplaces reached 674 million, an increase of 20 million from the 12-month period ended March 31, 2019. Over 70% of those new consumers were from less-developed cities in China, a fact that was regarded as Alibaba's successful push into lower-tier Chinese cities. BABA Stock and the CloudAlibaba is rapidly expanding into many other lucrative industries, including cloud computing infrastructure, digital payments, online entertainment, and food delivery.With a population of 1.4 billion people, China is the largest country in the world. A rising middle class leads to higher consumerism, and that bodes well for many industries in China. One of those industries set to benefit is cloud computing.Alibaba's concentrated push deeper into cloud computing is increasingly being compared to the success of Amazon's (NASDAQ:AMZN) cloud business. In cloud computing, BABA is now the market leader in Asia.In the most recent earnings result, investors cheered that BABA's cloud computing revenue soared 66% YoY. It now brings in about 7% of total revenue.Alibaba has over 40% of the public cloud market in China. The market share of Tencent Holdings (OTCMKTS:TCEHY), its biggest competitor, is about 11%.As a result of increased diversification as well as the growth in the cloud space, Alibaba's total revenue is expected to grow by double-digit percentage rates. Such a growth rate would indeed be impressive for a company with a market cap of about $461 billion. BABA Stock and International ExpansionFinally, forward-looking investors may want to pay attention to BABA's international growth numbers too. Currently, more than 90% of the ecommerce giant sales are made in China.But BABA also has investments in start-ups in South Asia and Southeast Asia. Higher incomes and rising internet penetration rates are likely to strengthen both regions' eCommerce markets and contribute to sustainable growth for BABA stock.Among the start-ups in those regions in which BABA has stakes are Paytm, an Indian digital payments provider, and Lazada, a Singapore-based eCommerce company that is growing in overseas markets. For example, according to the most recent results, Lazada achieved over 100% YoY order growth.The group's international businesses is led by its overseas marketplace AliExpress which also expanded with 29% YoY sales growth.BABA is also looking to partner with European companies. Many European companies are still discovering new ways to enter the Chinese market, and BABA may enable them to connect with Chinese customers faster.BABA's mobile payment network, Alipay, is also seeking to expand in Europe. International growth will not only help increase the company's bottom line, but it will also enable BABA to diversify away from China, lowering the macro risk of BABA stock. The Bottom Line on BABA StockAlibaba stock has multiple catalysts to drive growth in the coming years. Its core marketplace operations provides the group with strong cash flow. In other words, eCommerce, cloud computing, and other investments throughout China and globally make it a disruptor and a sound long-term investment.In China consumer disposable incomes are going up, fueling growth in many sectors, including eCommerce. In fact, the e-commerce market in China is forecast to almost double within the next four years to reach $1.8 trillion. Therefore, even if the Chinese economic growth pauses for a few quarters to come, the country's growth potential is intact.Therefore long-term investors should view any decline in Alibaba stock as a good opportunity to buy into the shares.However, traders with a short-term horizon should remember that there might be further choppiness and even profit-taking in Alibaba stock. The daily volatility of Alibaba stock is high, giving it a wide trading range, so short-term traders should proceed with caution.As of this writing, Tezcan Gecgil did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 CBD Stocks to Buy That Are Still Worth Your Investment Dollars * 5 Stocks to Buy With Great Charts * 5 Goldman Sachs Stocks to Buy with Over 20% Upside Potential The post Despite Volatility, Right Now Is the Time to Get into BABA Stock appeared first on InvestorPlace.
Nio (NYSE:NIO) stock has seen a nice rebound since the start of September. The Nio stock price has bounced from a low of $2.58 on September 3 to $3.12 at the close September 16. With new financing in place, Nio could hang on as it pursues the path to profitability.Source: xiaorui / Shutterstock.com But is a turnaround realistic?Tesla (NASDAQ:TSLA) will soon open its Shanghai facility. The Chinese EV market is an opportunity, but Nio does not appear to have a clear-cut edge.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 Tech Stocks You Should Avoid Now Will the company survive and thrive? The future has yet to be written. But given the valuation of Nio stock, investors should continue to practice caution. Recent Developments With Nio StockWhether you are a Nio stock bull or bear, you can't deny one thing: The company needs cash. Earlier this month, the company raised $200 million via a convertible debt offering. The buyers were Chinese conglomerate Tencent Holdings (OTCMKTS:TCEHY) and Nio's own CEO, William Li. The convertible notes come in two tranches. The first tranche matures within a year, and is convertible at $2.98 per share. The second tranche matures in three, and is convertible at $3.12/share. This successful financing helped to push up the Nio stock price. As I have discussed previously, financing is of big importance to Nio. The company not only loses money on an operating basis, but posts negative gross margins as well. The company is no stranger to convertible debt, raising $650 million last January using convertible notes. But while convertible debt is a cheap, it is dilutive. If NIO does manage to turn itself around, much of the upside will be soaked up by bondholders exercising their conversion rights.The other major morsel of news was the China-U.S. trade talks. The two countries plan to resume high-level trade talks in October. The trade war affects the company, but not in a direct way since its core market is domestic. China's economy continues to cool. The last thing it needs is a trade war that exacerbates these growth concerns. With a slowing economy, EV makers will have a tough time selling their vehicles. With the Chinese government cutting EV subsidies, demand will continue to slack for the company's E6 and E8 vehicles.This means NIO stock's bounce back may be a short lived. While the Nio stock price has fallen ~70% from all-time highs, shares remain overvalued. Competition Makes NIO's Valuation Mind-BogglingNio stock is overvalued. There's no two ways about it. With the company unprofitable, the only usable metric is the enterprise value/sales (EV/Sales) ratio. The stock currently trades at an EV/Sales ratio of 4.2. Compare this to Tesla, which trades at an EV/Sales of 2.2.Why pay a premium when you get get Chinese electric vehicle (EV) exposure with TSLA? Yes, Nio stock is more likely to see parabolic growth due to its size. Tesla is too big to see a 500% or 1000% return if all catalysts play out. But at least Tesla has positive gross margins. Nio continues to sell cars for less than their production cost. Its hard to see how that will play out favorably.Protectionist policies may favor NIO over foreign-owned EV brands like Tesla. But what's to say they have any particular edge over other Chinese companies? There are scores of other automakers making electric vehicles in China. Take a look at this chart of Chinese EV sales in May. The top dogs are BAIC, BYD (OTCMKTS:BYDDF), SAIC, JAC, and Chery. With the exception of BYD, all of these are state-owned enterprises. The state-owned Chinese automakers have the scale and resources to one day build EVs profitably. I could see Nio eventually getting absorbed by one of the state-owned Chinese automakers. Nio already builds its vehicles in a JAC-owned facility.High investor exceptions prop up the Nio stock price. But if more bad news comes out of the company, these speculators could make a run for the exits. Nio Stock Remains a Hard PassThere is too much risk and not enough opportunity with Nio stock. The company's losses require additional capital infusions. Until the next earnings release (on September 24), investors remain in the dark about the company's cash position. But despite these risks, shares remain overvalued. The Nio stock price continues to imply the automaker will be a major player. But there is little to suggest they have an edge against state-owned automakers, or foreign brands such as Tesla.The stock remains a hard pass. While it is possible shares could rally on better-than-expected performance, shares could easily nosedive if results are worse than projected. There is nothing wrong with paying a premium for a company going places. But NIO is not exactly setting the world on fire. * 7 Momentum Stocks to Buy On the Dip Consider opportunities elsewhere, and avoid Nio stock.As of this writing, Thomas Niel did not hold a position in any of the aforementioned securitiesThe post Despite New Developments, Nio Stock Makes TSLA Look Stable appeared first on InvestorPlace.
Oil ain’t what it used to be in emerging markets. Now there’s not a single natural-resources exporter among the top 10 companies in the MSCI Emerging Markets index, which is led by Chinese internet giants (0700) (ticker: 700.Hong Kong) and (BABA) (BABA). Compare that to a 9% nose dive in early August after Donald Trump reignited the U.S.-China trade war and Beijing countered by letting its currency devalue.
(Bloomberg) -- Sign up for Next China, a weekly email on where the nation stands now and where it's going next.For decades, NetEase Inc. has been the perennial runner-up to the likes of Tencent Holdings Ltd. in China’s evolving internet landscape. Now it’s betting on a bookish computer scientist to catapult it to the top of the class in the nation’s $36 billion online education market.Zhou Feng, chief executive officer of NetEase Youdao, is charged with helping NetEase escape from under Tencent’s enormous shadow and find life beyond video games. The U.S.-trained software coder handpicked by billionaire founder William Ding Lei is creating an all-in-one learning platform to tap the lucrative space where education and technology overlap. To bankroll that expansion, the company could float Youdao, last valued at $1.1 billion, as soon as this year.Zhou is counting on a decades-old custom. Every summer, millions of Chinese high school students sit through a grueling two-day college entrance exam, or gaokao, that helps determine the course of their lives. That’s why China’s tiger moms and dads have long sent their kids from as early as kindergarten age to private tutoring classes for English, math and sciences.Intense competition has fueled an education boom, particularly targeting the K-12 group that includes students from kindergarten through high school, creating a coterie of multi-billion-dollar corporations. Leading players like New Oriental Education & Technology Group Inc. and TAL Education Group that still rely mainly on in-class teaching have gone public in the U.S. and seen their shares soar. Online startups such as the Tencent-backed VIPKid are still trying to convince parents that digital instruction can be as good, if not better than brick-and-mortar classrooms.Through combining content with the latest technology, Zhou sees a business chance for Youdao, whose name loosely translates to “there’s a way”. Courses can be taught through high-speed live-streaming, enabling smooth communication between teacher and student. Artificial intelligence-powered “tutors” can grade homework and use data to evaluate student test results, he said.“That’s what we have always been good at,” said Zhou, 40, a University of California at Berkeley alumnus with a penchant for blending English words into conversations. “Almost every industry in China has been transformed by the internet, but that’s not yet the case for education.”Revenue for China’s online education market is estimated to have reached around 252 billion yuan ($35.7 billion) in 2018, and is expected to more than double in 2022, with 264 million paying users, according to iResearch.But there’s yet to be a clear winner -- even for top tuition providers like New Oriental, its digital arm Koolearn in 2017 only accounted for less than 1% of the total revenue in the local online teaching market, according to Frost & Sullivan data cited in its prospectus. What sets Youdao apart is its exclusive focus on online and its expansion into education-related hardware. It has launched a slew of products from apps for note-taking and children’s stories to smart devices like a 799 yuan electronic dictionary pen, which allows students to scan printed text and translate it instantaneously.“NetEase’s technology support and the company’s online DNA and roots should make its products more sophisticated than traditional education providers,” said Bloomberg Intelligence analyst Vey-Sern Ling. Still, not having physical classrooms means it could be difficult for Youdao to expand beyond structured, standardized learning or test prep, he said.NetEase could do with a win. Founder and CEO Ding has a master plan for China’s second largest game developer to delve into three sectors including e-commerce, music streaming and online education, but the result is best described as mixed. Its music arm has grappled with rising content costs, as it has to sublicense a large chunk of songs from its much bigger rival, Tencent Music Entertainment Group. Although e-commerce has grown to become NetEase’s largest division after gaming in terms of revenue, it sold its popular import platform Kaola to Alibaba Group Holding Ltd. in a $2 billion deal.That magnifies the importance of Youdao and its leader, with whom Ding shares a long history. Back in 2004, when Zhou was pursuing his doctorate degree in computer science, NetEase’s CEO came across his paper on filtering junk emails, and, ironically, shot him a message that was mistaken as spam. It had no body text but just a subject line: “I’m Ding Lei, I have a technical question for you.”The two eventually got in touch via phone calls, and Zhou worked part-time for NetEase for three years. After earning his doctorate in 2007, he officially joined the company as lead architect for Youdao in Beijing, which at the time was trying to morph from a digital dictionary into a web search engine. To challenge the local leader Baidu Inc., Youdao’s approach was to operate a slew of vertical search services at one time, in everything from news to blogs to maps.Those efforts failed, and in 2012 Zhou decided to close the search operation. “That was when we hit our lowest point,” he said. Zhou shifted the 400-person team to develop learning apps instead.Youdao’s revenue rose 60% in 2018 from a year earlier, while sales for K-12 courses increased three-fold in the same period, he said. Online courses have surpassed advertising as Youdao’s largest income stream, Zhou said.Now of the nearly 2,000 employees Zhou oversees at Youdao, half are teachers and other staffers dedicated to building up its online class portfolio. “Learning is much more difficult than playing video games,” he said.To contact the reporter on this story: Zheping Huang in Hong Kong at firstname.lastname@example.orgTo contact the editors responsible for this story: Edwin Chan at email@example.com, Colum MurphyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
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) -- 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 firstname.lastname@example.orgTo contact the editors responsible for this story: Celeste Perri at email@example.com, John Viljoen, Paul JarvisFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Beta of Activision Blizzard's (ATVI) upcoming Call of Duty: Modern Warfare game is now available exclusively for PlayStation 4 users.
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.
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 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 firstname.lastname@example.org;Yvonne Man in Hong Kong at email@example.comTo contact the editors responsible for this story: Edwin Chan at firstname.lastname@example.org, Colum MurphyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Chinese startup Kuaishou is considering 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 email@example.com;Lulu Yilun Chen in Hong Kong at firstname.lastname@example.orgTo contact the editors responsible for this story: Peter Elstrom at email@example.com, ;Fion Li at firstname.lastname@example.org, Colum Murphy, Edwin ChanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
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.
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.
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.