Tencent Holdings Trading forecasts and signals

Taiwan Semiconductor, the world's largest semiconductor manufacturer, has reported that prices for its products will rise by about 6% from January 2023, despite concerns recently expressed about a potentially disappointing second half of 2022.The current price increase is already the second in 2022. The company attributes this to disruptions in global supply chains and the associated increase in inflation. Otherwise, if prices are not raised, there will be interruptions with components and components for Apple, Qualcomm, AMD and many other corporations that are heavily dependent on the supply of these parts from Taiwan.On the premarket in the USA today, TSMC shares are rising in price, rising by ...

TSMC, the world's leading chipmaker and Apple's main supplier, expects revenue to grow by about 30% this year, thanks to steady demand for electronics despite global macroeconomic uncertainty. TSMC Chairman of the Board of Directors Mark Liu expressed confidence in the ability to exceed last year's growth, which was at the level of 24.9%.In the 1st quarter of 2022, the company's profit increased by 45% on the background of increased sales and increased profitability of the business, while revenue increased by 36%. The shortage of microchips and chips on the world market increases the demand for the company's products at times, the main thing is to have time to produce the volumes necessary for the market. And against the background of a decrease in the incidence of Covid-19 in Asia and the cancellation of lockdowns, as well as due to an increase in operating profit margin by 4.1% in the first quarter of 2022, compared with last year, the company's revenue may even exceed growth forecasts by 30%, in our opinion it may grow by ...

Asian stock indexes closed mostly lower amid continuing concerns about the spread of the Delta virus variant and dramatic repressive measures by Chinese regulators against technology companies.South Korea is struggling to contain the fourth wave of Covid-19, with the number of new cases remaining at 1,200 for the second day in a row.In China, the spread of the Delta variant from the mainland coast to the inner cities prompted the authorities to take strict measures.Shares of online games fell after state media branded online games "opium" and compared them to drugs.In Hong Kong, Tencent shares fell by -6.1%, as an article in the Economic Information Daily calls for further restrictions in the industry to prevent addiction and other negative effects on children.Japanese stocks fell after Prime Minister Yoshihide Suga reported on the growing infection of COVID-19 among Japanese people aged 20 to 30 years.Video game company Nexon lost -6.5% of the value of securities, as Chinese state media branded online games "spiritual opium" in Beijing's latest attack on technology and social habits.Shares of Nintendo fell by -1.1%, Bandai Namco Holdings - by -1.5%, Konami Holdings-by -2.3%, and DeNA - by -3.9%.Airline quotes fell: ANA Holdings and Japan Airlines lost -2-3%.Shares of mergers and acquisitions consultant GCA rose by 28.5% after the American investment bank Houlihan Lokey announced a tender for the acquisition of the company.As for economic news, in July, consumer prices in the Tokyo area fell by -0.1% year-on-year. This was in line with expectations after an unchanged value in June.Australian markets closed lower as the Reserve Bank stuck to its plan to scale back its bond-buying program despite Sydney's prolonged lockdown.Weak metal prices put pressure on the mining sector: shares of BHP and Fortescue Metals Group fell by -1.4% and -1.6%, respectively. Oil Search, Woodside Petroleum and Santos securities fell in price by more than -1% due to growing oil losses overnight due to concerns about fuel demand.Shares of Afterpay rose 11.4% to increase profits compared to the previous session after Square Inc. agreed to a takeover offer with a 31% premium. Appen shares rose 5.4%, while Wisetech Global rose ...

Since March 2021, Chinese stocks have been at their peak. Everyone's favorite Alibaba, JD.com, Baidu from its highs fell by more than 30%. Shares of educational companies - Tal Education and New Oriental in general collapsed by more than 80%.The reason for this decline is not only in the latest news on education reform and in huge antitrust fines on technology giants. It all started back in February 2021:The People's Bank of China was the first in the world to stop stimulating the economy from the consequences of the pandemic.The Chinese government has begun strict antitrust regulation of technology giants. The beginning was laid in April 2021 - Alibaba was fined a record $2.8 billion. This was followed by fines on other tech giants, including Tencent, JD and Baidu. Fines and antitrust regulation do not stop even now - Tencent was fined another 500 thousand yuan, and the car-sharing and taxi service Didi is not only under threat of a fine, but is also blocked throughout the Middle Kingdom.  The big question is over the Chinese debt market. There is still no clarity on the debt obligations of the largest state-owned company China Huarong. If earlier investors were sure that the government would support the financial conglomerate in a difficult situation, now there is no such confidence.The confrontation and trade disputes between China and the United States, which began under Trump, continue. At a meeting in Tianjin this Monday, the parties reproached each other for violating trade agreements, which threatens to aggravate the conflict.The most important thing is that after all the actions of the Chinese authorities, geopolitical risks have increased. JP Morgan urgently downgraded the ratings of Tal, New Oriental and Gotu, saying that the education reform will make the sector of Chinese educational stocks actually become uninvested.  Fears of a negative situation in the educational sector are automatically transferred to the shares of Chinese technology giants. If the fines continue, international agencies will also lower their investment ratings. This means that international funds will be forced to reduce the share of Chinese stocks in their portfolios.  The risks of trade disputes between China and the United States are added. If the conflict is not resolved, there is a high probability of continuing delisting of Chinese shares from American platforms. For example, in January 2021, the New York Stock Exchange delisted three Chinese companies: China Mobile, China Unicom and China Telecom.  At the same time, the economic situation in China does not give rise to negativity.  The composite index of business activity remains above 50 and indicates continued economic growth. GDP growth rates are at doc-like levels, but due to a decrease in liquidity from the Central Bank of China, GDP data are coming out worse than analysts' expectations. The inflation rate in June fell to 1.1% and remains at low levels. Despite all the trade disputes and the risks of a pandemic, Chinese exports to the United States grew at the fastest pace since 2016. And the total PE of Chinese companies according to the Shanghai Stock Exchange now stands at 17.27, which makes Chinese shares very attractive compared to their global counterparts.  In addition, the Chinese yuan against the dollar is at the lows of 2017 - the time of the artificial devaluation of the yuan by the Central Bank of China, which was able to support the export of goods from the country.If the Fed's rhetoric tightens, the Chinese yuan may weaken against the dollar, which will make Chinese goods more attractive on the international market.  Plus, the country has such reserves of rare earth and industrial metals that it is able to regulate the prices of copper, aluminum and zinc on world markets, selling them from strategic reserves in case of price increases.  In general, despite the geopolitical and domestic risks, the Chinese economy indicates strong prospects for continued economic growth, which will support Chinese stocks, which can show a significant increase in profit and revenue.The reasons for such pressure on their own companies from the Chinese government are poorly explained. It is believed that the government wants to reorient itself from exports to the domestic economy of the country. To this end, strict antitrust measures are being taken in order to reduce the power of technology giants and tighten competition between companies in the domestic market. there are other theories. Jess Fried, a law professor at Harvard University, believes that the Chinese authorities are trying to reduce the price of Chinese companies traded in the United States to minimum values with the help of various prohibitions, which will allow rich Chinese investors to delist them cheaply and get excellent assets at a significant discount. As an example, the history of Qihoo 360 is given. In 2015, the shares of Qihoo 360 were bought for $9.3 billion by a group of private Chinese investors. delisting was carried out on the US stock exchanges, and in 2017 the company again became public on the Shanghai Stock Exchange and its capitalization was already $56 billion. Most likely, this cannot be done with Alibaba, JD.com and Baidu - they have too much capitalization, but with smaller companies such actions are quite likely.  Opinion  It is worth considering that in the market, a decline of more than 20% is considered as the beginning of a bearish trend. The negative situation on the Chinese market continues and the news on Chinese stocks recently does not please investors at all. Given that there has not yet been a corrective movement on the world markets, that the Fed and the ECB may tighten their ultra-soft monetary policy, and therefore the Central Bank of China will also raise the rate, and antitrust regulation in the Chinese market can be continued-investments in the Chinese market are now subject to high risks. But on the other hand, high risks are high profits. If you invest, then you should look at companies with high capitalization, without debts and with high cache generation. There are not many of them, vivid examples are Alibaba and JD.com. Otherwise, now investing in Chinese stocks on a broad front can lead to sad consequences - remember Tal and New ...

The Chinese investment and venture capital company Tencent completed the third quarter of this year with a net profit of 39.51 billion yuan, which is 3% higher than the same indicator last year. Compared to the previous quarterly figures, net profit growth slowed down. At the end of the reporting period, revenue was recorded at 142.37 billion yuan. Its volume increased by 13% over the year. The revenue received from the sale of games increased by 8% in 12 months, amounting to 75.2 billion yuan. The indicator of social networks was marked at the level of 30.3 billion yuan, an increase of 7% over the year. Online advertising brought the holding an income of 22.5 billion yuan. Compared to the same period in 2020, its growth was 5%. Revenue from financial and technological business services jumped by 30%, reaching 43.3 billion yuan. At the end of the quarter, the operating profit of 40.8 billion yuan showed an annual increase of 7%. The market value of Tencent has decreased by 14.3% since January of this ...

China is considered a country with an economy that is developing rapidly, because it has numerous corporations that have attracted investors of various levels in recent years. And at the moment, financial market participants have good reasons to avoid investing money in this country. Let's see why.To begin with, there are still conflicting relations between the United States and China, which have not changed since Biden became president. Trump, his predecessor, during his rule, heated the degree of conflict between the countries to a very high level.The second reason is the problems of Chinese enterprises with the US regulator. The end of spring of this year was marked by the fact that the SEC began implementing the law on delisting for Chinese enterprises.And finally, the third reason is the recent decisions of the Chinese authorities, which were aimed at taming the largest corporations in China. We will discuss these and other aspects in more detail.Taboo on educationIn recent years, the tutoring industry in China has grown rapidly, as the middle-class society has tried to send its children to the best institutions in China.It was predicted that in three years, the total revenue from this area of online education services will be 491 billion yuan ($76 billion). The total market volume before the introduction of the measures actually reached $100 billion. As a result, the popularity of these enterprises on the stock exchange has increased.The shares of the industry began to fall after the Chinese leadership announced that they plan to introduce new rules for this area.According to them, companies are required to be registered exclusively as non-commercial. They no longer have the right to mobilize private capital, and even foreign capital, and they can no longer conduct IPOs.Consequently, all these companies will now have to completely change the business model.Read more: What is delisting on the stock exchange?The Fall of the megamonopolyChinese consumers, unlike Western ones, prefer price to quality. If the brand has not reached a high level of social or economic status, the consumers of the Middle Kingdom become very sensitive to value.This greatly affects the economy and the organization of business in China. In China, the margin is so low that businesses have no choice but to specifically reduce prices. This is done in order to make the product more attractive to customers.One of the most striking examples is Xiaomi. It has become a leader in the sale of smartphones, gadgets and household appliances. Apple has a market share of 17%, and this percentage is even higher in mainland China. Xiaomi reached this level only after limiting the profit margin of smartphones at the level of 5%.This led to the emergence of Chinese technological monopolies, and the state lost control over some of them.Last year, the Chinese government began to tighten control over technology companies. In November last year, the government banned the Alibaba subsidiary Ant Group from entering the stock exchange. Then it turned out that Ant Fintech is turning into a financial company that is subject to banking regulators.Then the pressure on technology companies increased: at the end of 2020, the authorities began an investigation into Alibaba itself. The online store was accused of violating the antimonopoly legislation. The investigation lasted 3.5 months, and the company was fined a record $ 2.78 billion.The latest news that worried investors turned out to be the beginning of an investigation by the Chinese authorities into the Didi taxi service, as the investigation began the day after the success of the IPO on the New York Stock Exchange.Read more: What is the New York Stock Exchange (NYSE)Thus, the DiDi service is now 9 years old, but during this period the company captured 88.7% of the Chinese market. The liler company is on the market, it changes the tariffs and fees of drivers as it wants, and all because there are no stronger competitors.Therefore, it is not surprising that DiDi attracted the attention of the regulator. The Chinese authorities recently banned the use of the company's application, and now new users cannot register. It is planned to fine this company for a large amount for violating the norms of legislation on consumer protection. We remind you that earlier Alibaba paid the largest fine in China for the same reason.It seems that the Chinese authorities are taking their giants seriously. Alibaba and Didi are the first companies to be targeted. The smoke from the shelling of the country's leadership of these technology giants has not yet dissipated, and the Chinese authorities have already dealt a blow to the subsidiary of the holding company Tencent, demanding that it give up music licensing rights, and also imposed a fine for insolvency.The US is a key opponent of ChinaChinese businesses are suffering from tensions between the US and Beijing. Thus, large Chinese companies operating in the field of e-commerce (Alibaba, Baidu, etc.) are under pressure.And the restrictions imposed by the United States on trade with China have already significantly affected the cost of manufacturing goods and components from the United States in China, which were previously sold on these e-commerce platforms, limiting technological partnerships.In addition, under Trump, a law was passed according to which foreign companies registered on US stock exchanges must provide extensive verified reports to US regulatory authorities. In fact, this measure was introduced quite recently.Approximately 250 Hong Kong and Chinese companies with a capitalization of $ 2 trillion faced tougher audit requirements. Not everyone can provide quality control of audits. As a result, there is a risk that some of these companies will be excluded from the listing, which could directly affect all Chinese shares.These SEC measures may deter foreign direct investment in China. Recall that the growth rate of foreign investment in 2020 exceeded the growth of China's GDP. Without foreign direct investment, China's long-term plans to increase domestic consumption and gradually liberalize foreign ownership in various sectors of the economy will be suspended.In May of this year, the European Commission decided to ban foreign companies from bidding and buying companies on the domestic market. All these measures are directed against Chinese-funded companies and are aimed at the microelectronics sector.Read more: Listing of securities on the stock exchangeEconomic downturnIt's not just politics that makes the Chinese stock market unattractive. The economy of the Middle Kingdom was the first in the world to start growing after stagnation, which was caused by the blockade of the coronavirus, but the growth rate slowed down.Thus, according to the latest report, the growth of the Chinese economy in the 2nd quarter fell to 7.9% compared to last year from 18.3%. The central Bank of China has reduced the financing that many banks must keep in reserve.As commodity prices have risen, the industry's inflation rate has reached its highest in 10 years. At the same time, production slowed down due to the disruption of supply chains.Read more: Causes of inflation and scientific approaches to their studyThe growth in the service sector also slowed down due to a new outbreak of coronavirus in southern China and further restrictions that reduced the activity of consumers and enterprises.Production in the country also slowed down. Industrial production increased by 8.3% in early summer compared to 2020, showing a slight decrease compared to an increase of 8.8% in May. Car production fell by more than 4% in June compared to a year earlier due to a shortage of chips.Unemployment is also a concern. The urban unemployment rate has remained at 5% in recent months. At the same time, the youth unemployment rate jumped from 13.6% to 15.4% three months earlier.In this context, problems with the US and the EU may lead to an even greater outflow of investment from China, if, of course, US regulators tighten sanctions against this country.Buy or sell?At the moment, the technological sphere of the People's Republic of China is in deep decline. Such promotions as JD.com and Alibaba, have fallen in value by more than 30% from their maximum.However, we do not believe that such a low price level is now profitable for buying. The Chinese leadership of the country has not yet completed the cleanup. New measures can start for any reason and on any day. Sometimes the information that led to the decline of shares does not have time to reach even the foreign media, and investors have to make decisions blindly.It is difficult to say when the Chinese authorities will stop, and it is unknown which of the companies will remain in the game. We can only wait and see.Read more: People's Bank of China (PBOC) - history, structure and ...