Tcehy (Tencent Holdings Limited) Review
tcehy stock – Tencent is a Chinese Conglomerate focused on technology and entertainment. The company has establish itself as the company with the biggest investment in the gaming industry. No company comes close except for the recent Microsoft 68.7 billion USD Activision Blizzard acquisition.
Because of the massive investment in the gaming industry, the company has been to earn a lot of revenue.
In 2021, the company invested in a record 62 video gaming startups which is more than double what the company did in 2020, showing the aggressive investment strategy of the company when it comes to investment in video games. The company derives about a 3rd of its total revenue from gaming.
The company was established in the year 1998 in Shenzhen and since then the company has expanded into one of China and Asia’s most formidable tech companies. Since its establishment, the company has expanded into Media entertainment. In summary, the company is actively into online advertisement and value-adding services.
The stock market has not been in its best form at the moment especially since the coronavirus pandemic inflicted injury on the economy. Tcehy stocks and many other stocks have been a bit impressive
So what is do we know about the past stock performance of Tcehy?
The past 5 years:
The performance of Tcehy stocks in times past was encouraging and strong. Before Covid-19 came on the scene in 2020, Chinese stocks and stocks generally across the board were enjoying a strong bullish rally. The bullish rally on stocks like Tcehy could be traced to the strong economic performance of the Chinese economy. But not only because of the Chinese Economy, but also investment in multiple video gaming startups also paid off for the company as the company saw strong earnings from its video gaming investment which saw them become the leading video gaming company in terms of earnings in the world.
Within this period of strong earnings and a good economic outlook for China. The company saw its market capitalization reach a whopping 579 billion USD in 2018, becoming the first Chinese and Asian company to hit that mark. Also within this period the price of Tcehy stocks moved between 26.28 USD on February 10 2017 to about 60.96 USD on January 26, 2018. But series of market turbulence and uncertainty caused the stock price of Tcehy to crash in the same 2018 to about 33.12 USD.
The coronavirus pandemic of 2020 accelerated the growth of Tencent as there were more demands for video games all around the world. The demand for video games was accelerated by pandemic-induced lockdown and restrictions which caused many to stay indoors. Within this period, the market cap of Recent increased from its peak of 579 billion USD to about 699 billion USD in 2020. Within this period, the stock price of Tcehy also increased from 37.127 USD in October 2019 to 64.00 USD on February 14, 2020. This was a record high for the Shenzhen-based company.
the stock price for Tcehy kept rising; it repeatedly broke its previous record reaching 70.40 USD on July 10, 2020. And by the 6th of November 2020, the stock price for Tcehy hit another record level of 79.76 USD.
These stock prices were stimulated by the increased earnings from video games and other Tencent holdings.
The impact of the coronavirus pandemic lingered on in 2021 driving up record demands for video games and other Internet services provided by Tencent. The resultant effect of the record demand caused Tencent’ market cap to hit a record of 950 billion USD just a few millions shy of the 1 trillion USD market cap. Consequently, the stock price of Tcehy increased from its previous high of 79.76 USD in November 2020 to a new record high of about 100 USD.
Tcehy Stock – Current outlook
Although Tencent holdings have grown in leaps and bounds with the increased earnings from video games which saw it to the list of top most valuable companies. The company has seen hitting all-time market cap in early 2021 and lost almost half of its market cap and stock price. Currently, the company has a market cap of 558.29 billion USD and a current stock price of 57.60 USD as of today. This is happening despite the record sales going on. But what it’s responsible for this? It is simple, the Chinese Big-tech regulatory crackdown. The Chinese governments have been so keen on the crackdown. The crackdown has caused the stock value of Chinese companies to drop.
It is the main driving force behind Chinese tech companies dropping out of the top 11 most valuable brands in the world. And as of today, no Chinese company is currently in the top 11 most valuable companies in the world.
The future outlook of Tcehy Stock (The next 5 years)
The next 5 years for Tcehy are kind of shaky considering the Chinese Government regulatory measures that will be targeted at these companies in the years to come. This measure is still expected to linger on. But despite the strong regulatory presence, there is a strong expectation of increased earnings for Tencent particularly Q1 earnings which many believe would be a strong increase.
According to the company’s plans for the next 5 years, the company would rather choose to focus on and pursue long-term value adding social programs instead of improving its economic profits.
With this in view, the company allocated about 800 million dollars to facilitate the program.
Also with the regulations in the view from the Chinese regulatory agencies, the company is expected to cooperate with relevant regulatory agencies which would no doubt lead to decreased regulatory scrutiny resulting in greater economic outlook for the company.
Aside from these factors, more collaboration is expected with major Chinese tech firms like Alibaba. The company announced that Alibaba would be allowed access into Tencent Ecosystem. This would provide an avenue for Alibaba to utilize services like WeChat. So as time goes on things could begin to change for Tencent. Probably in the future, we could one day see Tencent hit the 1 trillion market cap but till then we can only hope