appConfigEntityId

bodyType

customContents

entityId

entityUuid

isVideo

articlePageQuery

article

articleSchemaContent

content

hooksArticlePageAdvertisementConfigArticle

appConfig

filter

json

liveArticle

Laura He

Tencent hit a new all-time high of HK$368.4 on Friday, after Morgan Stanley raised the stock’s 12-month price target to HK$420, up 14 per cent from its previous estimate.
Tencent closed at HK$368, paring some early gains, but still up 1.7 per cent from the previous session. It extended its winning streak to a sixth straight session. The stock has soared 94 per cent so far this year.
Morgan Stanley is staying overweight on the stock and estimates the Chinese internet giant will post record game revenues in the third quarter, buoyed by the continuing momentum in the world’s top-grossing mobile game Honour of Kings.
The bank’s previous 12-month forecast for the stock was HK$370.
“We expect Tencent to see another record-high quarter in games, driven by continued momentum in Honour of Kings as well as other key legacy titles,” Grace Chen, Elaine Zhang, and Alex Ko, analysts for Morgan Stanley, said in a research note on Friday.
The advertising segment is also likely to help the company post a solid quarter.
Total game revenue for the third quarter could grow 40 per cent year on year, with mobile games reaching another historical high of 17 billion yuan.
‘This is my daughter, Honour of Kings’: 5 times China’s mobile gaming obsession got out of hand
“Honour of Kings continued to outperform during the third quarter, with favourable seasonality and various promotional events driving up user engagement and spending,” the analysts said.
According to US app analytics service provide Sensor Tower, revenue from Honour of Kings on the iOS platform was up 30 per cent on a quarterly basis during the July to September period, versus 24 per cent quarter on quarter growth in the April to June period.
Honour of Kings became the world’s most profitable game across all platforms in May, according to SuperData Research. The game had over 200 million registered users in 2016, Tencent said.
Another driver to Tencent’s revenues for last quarter could be advertising, Morgan Stanley analysts said. Ad revenues could reach 11.2 billion yuan in the third quarter, up 50 per cent from the same period a year ago.
For media advertising, the analysts expect Tencent’s investment in quality content to continue to drive up traffic and the time spent. For social and other advertising, the opportunities offered by the WeChat instant messaging platform will also serve as growth engines. WeChat is also known as Weixin in China.
For 2017, Tencent’s revenues could increase 53 per cent to 232.3 billion yuan (US$35 billion), driven partly by higher advertising income and greater fintech offerings, Morgan Stanley estimated.
The analysts also expect Tencent to recognise a one-time gain from its investments in ZhongAn Online this quarter.
ZhongAn Online, China’s first online-only insurer, debuted in Hong Kong on September 28, raising US$1.5 billion, marking the city’s biggest fintech listing so far. Tencent holds a 10.42 per cent stake in the firm.
Tencent is expected to release third-quarter results on November 15. Market consensus estimated its net profit at 15.6 billion yuan, up 46 per cent year on year, according to analysts polled by Bloomberg.
In the second quarter, Tencent posted a 70 per cent jump in net profit, blowing past market forecasts, thanks to the success of Honour of Kings.
Morgan Stanley rates a stock overweight when its total return is expected to exceed the average total return of the analyst’s industry coverage universe, on a risk-adjusted basis, over the next 12-18 months.
Currently, the target price estimates for Tencent by several investment banks are between HK$380 to HK$426, including Nomura and DBS.


Chinese investment in Europe surges to 7-year high despite rising trade tensions

US House foreign affairs chair warns AI sales to China could make America a ‘loser’

AMD CEO’s meeting with China’s vice-premier raises optimism about US AI chip imports

Chinese tech giants, from Alibaba to Tencent, race to dominate AI-powered digital gateways

Tencent Holdings

Tencent hits new high as Morgan Stanley raises price target on stock

The Honour of Kings mobile game had more than 200 million users in 2016. Photo: Bloomberg

China’s Tencent taps US for advertising to boost WeChat revenue growth

Tencent is lagging behind rivals Alibaba and Baidu in the domestic digital advertising market, according to eMarketer

WeChat mascots are displayed inside Tencent office at TIT Creativity Industry Zone in Guangzhou, China May 9, 2017. Picture taken May 9, 2017. REUTERS/Bobby Yip

The tech giant will allow US brands to directly market to Chinese consumers and tourists on its platforms. Photo: Reuters

Here’s why Tencent’s Honour of Kings has 200 million players

Honour of Kings is a fantasy role-playing game based on Chinese historical characters. Photo: SCMP Handout

How Tencent blurred the lines of gaming, social networking in Honour of Kings

The multiplayer online battle game has become wildly popular in China – so much so that some are questioning the social responsibility of its maker

*** ONE TIME USE ONLY *** Tencent's online games "Honor of Kings" Photo: Handout

People walk past a logo of Tencent Literature at a Tencent Interactive Entertainment stand during a book fair in Guangzhou, Guangdong province, China August 17, 2014. Picture taken August 17, 2014. REUTERS/Stringer ATTENTION EDITORS - THIS IMAGE WAS PROVIDED BY A THIRD PARTY. CHINA OUT. NO COMMERCIAL OR EDITORIAL SALES IN CHINA.

Tencent's online games "Honor of Kings" Photo: Handout

A child plays ’Honour of Kings’ by Tencent in Dezhou, China. Photo: Reuters

How Tencent CFO John Lo picked up valuable skills from a top Hong Kong-based MBA course

John Lo Shek-hon, chief financial officer for Chinese tech giant Tencent, is a product of an MBA programme in Hong Kong. Photo: Felix Wong

FILE PHOTO: Visitors use their smartphones underneath the logo of Tencent at the Global Mobile Internet Conference in Beijing May 6, 2014. REUTERS/Kim Kyung-Hoon/File Photo

Hong Kong’s ‘cloud’ services market heats up with Tencent expansion

People walk past a logo of Tencent Literature at a Tencent Interactive Entertainment stand during a book fair in Guangzhou, Guangdong province, China. Photo: Reuters

The icon for the Tencent Holdings Ltd. WeChat messaging application is seen in this arranged photograph taken in Hong Kong, China, on Thursday, Oct. 12, 2017. Regulators elsewhere may be clamping down on the financial industry's use of private messaging apps, but in China the practice is flourishing. Players in the country's $11 trillion bond market use personal accounts on WeChat and QQ for everything from distributing research to soliciting orders. Photographer: Justin Chin/Bloomberg

The icon for the Tencent Holdings Ltd. QQ messaging application is seen in this arranged photograph taken in Hong Kong, China, on Thursday, Oct. 12, 2017. Regulators elsewhere may be clamping down on the financial industry's use of private messaging apps, but in China the practice is flourishing. Players in the country's $11 trillion bond market use personal accounts on WeChat and QQ for everything from distributing research to soliciting orders. Photographer: Justin Chin/Bloomberg

Business

Companies

Markets

Money

Markets & Investing

Stock Talk

Investor Relations

Stock Quote Profile

Tencent will report third-quarter results on November 15, with Morgan Stanley expecting record-high revenues for the internet giant from its games portfolio


Mobile gaming

Video gaming

Morgan Stanley

Tencent hits new high as Morgan Stanley raises price target on stock

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Tencent will report third-quarter results on November 15, with Morgan Stanley expecting record-high revenues for the internet giant from its games portfolio

Tencent will report third-quarter results on November 15, with Morgan Stanley expecting record-high revenues for the internet giant from its games portfolio