Financial News
Written by: Gu Meiyi
2021-05-19 11:00
Last update date: 2021-05-19 11:00
Share king Tencent (0700) this Thursday (20th) before the release of the first quarter results, the stock price has regained the 600 yuan mark and the placing price of the major shareholder in South Africa.
The overall market expects that the group's first-quarter profit will range from 31.7 billion to 37.56 billion yuan (the same below), with a median forecast of 34.73 billion yuan, up 28.3% year-on-year.
Among the three businesses, the strongest growth is expected to be the financial technology business, with revenue expected to increase by 40% year-on-year.
However, the mainland has strengthened its anti-monopoly supervision on technology finance and platforms, and how Tencent will respond to the transition to business has attracted investors' attention.
Market forecasts for Tencent's business growth in the first quarter (Source: Bloomberg, in RMB)
On Thursday (20th) Tencent will announce its first quarter results. According to Bloomberg’s comprehensive analysts’ forecasts, based on non-GAAP accounting standards (Non-GAAP), the revenue for the first quarter will range from 128.66 billion to 139.04 billion yuan, a median The value was RMB 133.753 billion, up 23.8% year-on-year.
Net profit in the first quarter ranged from 31.7 billion to 37.56 billion yuan, up 17.1% to 38.7% year-on-year, and the median forecast was 34.73 billion yuan, up 28.3% year-on-year.
Business with the largest proportion: high-base growth of value-added services is expected to slow down
Tencent's three main businesses are divided into (1) Value-Added Services (VAT), which accounts for more than 50% of its revenue; (2) Fast-growing financial technology business; and (3) Online advertising business.
First of all, revenue from the value-added service business increased by 27% in the first quarter of last year to 62.429 billion yuan.
According to "Bloomberg" comprehensive analysts, revenue from this business is expected to reach 73.05 billion in the first quarter of this year, up 17% year-on-year.
Although the growth rate has slowed down, the analysis pointed out that due to the new crown epidemic in the same period last year, the mainland's online game revenue base was relatively high, which slowed down the revenue growth of related businesses in the first quarter of this year.
"King of Glory" game page.
(Online picture)
The strongest growth business: Fintech revenue growth is expected to exceed 40%
Among the three businesses, the strongest growth is believed to be the financial technology business, which includes increasing the revenue of commercial payment and wealth management platforms, and the growth of cloud business.
In the same period last year, this business grew by 22% year-on-year to RMB 26.475 billion, accounting for a quarter of the group's overall revenue.
This year's growth is expected to take another step. According to the estimates of Bloomberg's comprehensive analysts, the revenue of this business is expected to reach 37.339 billion in the first quarter of this year, with the increase further expanding to 41%.
Since the mainland is currently strengthening the supervision of financial technology, such as Ali's Ant Group, it is now necessary to establish a financial holding company and carry out rectification plans, including reducing the scale of the currency fund "Yuebao", cutting off consumer finance such as Huabei and Borrow Nesting of products in the payment link, etc.
How Tencent responds to regulatory requirements has also become an investor's concern.
The Mainland is strengthening the supervision of financial technology, and Ali's Ant Group needs to establish a financial holding company to carry out rectification plans (Reuters)
At the performance press conference in March, Tencent President Liu Chiping stated that the fintech business has a positive impact on users and small and medium-sized enterprises. He will not simply commercialize the product. He emphasized that he will always cooperate with other financial institutions instead of "subverting" financial institutions. Believes that other financial institutions can complement Tencent’s advantages.
He emphasized that his financial technology business has always attached importance to compliance operations and risk management.
Big Bank refers to improved competition in industries where regulatory risks are controllable
Regarding the future development of financial technology in the Mainland, major banks believe that it will enter a new era of slower growth, but the improved competitive environment is beneficial to Tencent.
Credit Suisse pointed out that the Mainland's financial technology industry will enter an era of structural slowdown, and rival Ant Group will once again focus on the profitability of the payment business, such as increasing the handling fee for each transaction.
This change can improve the competitive environment in the payment industry, especially for Tencent, and in fact, Tencent's payment business has high profitability and has become a major revenue growth engine for its financial technology business.
At the performance press conference in March, Tencent President Liu Chiping emphasized that its financial technology business has always attached importance to compliance operations and risk management.
(Visual China)
In addition, Yamato is optimistic that Tencent’s payment business transaction volume in the first quarter has the opportunity to grow by 35% year-on-year, mainly due to the low base effect, so it raises Tencent’s total revenue forecast for 2021-23 by 2%.
Due to the recent anti-monopoly investigation by the State Administration of Municipal Supervision and Administration of the Mainland and other departments on the technology network data platform companies, investors will pay attention to the guidance of Tencent's management on the reorganization of various businesses, especially the reorganization of financial technology.
Regarding regulatory risks, the Yamato report stated that the market is still concerned about the continued implementation of antitrust measures in the Mainland and the pressure on Tencent's stock price, but it believes that regulatory risks are controllable.
Based on the average P/E ratio of 31 times in the past 5 years, plus the launch of key games in the second half of the year, I believe it is a good opportunity to enter the market.
Tencent held its annual game conference on the eve of this week's performance, releasing more than 60 mobile game products and the latest version of content at one time, such as "Peace Elite", "League of Legends" and the mainland hit series "Celebrating the New Year" mobile games.
Tencent Liu Chiping Hong Kong stock trend
