Author Topic: TCEHY - Tencent  (Read 12974 times)

saltybit

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TCEHY - Tencent
« on: August 16, 2017, 09:22:42 AM »
Recent post from John Huber about Tencent
http://basehitinvesting.com/one-of-the-worlds-widest-moats/



saltybit

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Re: TCEHY - Tencent
« Reply #2 on: September 07, 2017, 10:34:51 AM »
http://technode.com/2017/09/07/tencent-music-kingdom/

Some highlights:
- controls 75% of China's music market
-  In 2016, recorded music revenue in China grew 20.3 percent driven by a 30.6 percent growth in streaming alone, according to IFPI.
- Turned a profit recently

ICUMD

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Re: TCEHY - Tencent
« Reply #3 on: November 02, 2017, 06:24:17 PM »
Anyone else a fan of this stock? 

A little expensive, but seems to have fantastic growth opportunity ahead.
Would love to discuss.
FIH.U TCEHY, IFFNY, BRK.B

clutch

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Re: TCEHY - Tencent
« Reply #4 on: November 02, 2017, 07:11:04 PM »
Hard to assess its moat or future as a foreigner.

ICUMD

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Re: TCEHY - Tencent
« Reply #5 on: November 02, 2017, 07:30:56 PM »
Why?  Naturally there are some risks - being a foreign stock in a communist country - similar to Alibaba.

However, seems to have a fantastic entrenchment in the country - broad base of services ranging messaging, payments, gaming, search.  Multiple ways of streaming profits from end users.  Phenomenal growth rate. 

Not sure I understand the lack of interest.
FIH.U TCEHY, IFFNY, BRK.B

villainx

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Re: TCEHY - Tencent
« Reply #6 on: November 02, 2017, 07:35:42 PM »
All the moms and grandmas I've seen use WeChat, but I don't know what that translate to.  For Facebook, mature adults using their networks have been view as a negative, but hasn't produced negative results thus far. 

As well, since the moms and grandmas are on WeChat, the corresponding kids have been on it as well.

Obviously, they've been Chinese.  But I heard the service has been fantastic.  Uh ... I thus far refuse to be one of the corresponding kid.

 :P

pau_

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Re: TCEHY - Tencent
« Reply #7 on: November 02, 2017, 07:41:57 PM »
I've been really enjoying a youtube channel called Strange Parts. The host explores markets & tech. Notably, he makes what is essentially a refurb iPhone from parts he buys at a market in Shenzhen, and then later figures out how to add a headphone jack to an iPhone 7 by designing and printing a new pcb that hijacks the lightning port internally.

One of the things you see in his videos is how everything runs off of personal WeChat accounts for coordinating business and making payments in the cell phone markets (including at at least moderate scaleŚcoordinating work with factories) in Shenzhen. It's gotten me a bit interested as well. Though I have yet to do any real analysis.

Here's a talk he gave on his projects at Noisebridge (hackerspace in SF), queued up to an explanation of the role of WeChat: https://www.youtube.com/watch?v=uPkGMhtnehE&feature=youtu.be&t=56m39


ICUMD

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Re: TCEHY - Tencent
« Reply #8 on: November 02, 2017, 08:39:34 PM »
The integration that this company offers is remarkable.  Really, its combining the products of large standalone American Internet companies into one offering.  I can order a coffee and a cab from the same interface that I message and share photos, buy music and do online gaming. They also have their own online marketplace.

It seems that they are now branching out into Hong Kong (if I understand correctly).  I think its has amazing prospects given the Chinese population size and the wealth effect that is going on there.  Likely stronger than any current NA company in the same space I would think.  I don't know if Tencent will be able to expand past the Chinese borders as easily as the NA companies have done.  However, I do think the Chinese government is supportive in making companies such as Tencent dominant players worldwide.
FIH.U TCEHY, IFFNY, BRK.B

HJ

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Re: TCEHY - Tencent
« Reply #9 on: November 02, 2017, 09:07:19 PM »
One of the best companies around with unique opportunity set in front of it.  BAT - which stands for Baidu, Alibaba and Tencent represent similar things as the FANG stock in the US does.  Except there's not much of competition from the traditional industries, so they BAT seem to venture into and dominate new markets with ease. 

Take payment, in the West, the banks would never have let IT companies control such a critical piece of the financial infrastructure.  When American Express came out, the banks banded together and came up with Visa and Master.  When Apple tried to get into payment, they ultimately decided to leverage the existing networks, rather than establish a new one.  In China, the banks and Unionpay are too bureaucratic and clueless with what's at stake.  They were busy fending off foreign competition by getting the government to set up barriers, meanwhile, Alipay and Tencent pay have very much taken over within a couple of years.  At this stage, Alibaba runs the biggest money market fund in the world, and Tencent and more so, Alipay own the foundational payment infrastructure, while the banks and Unionpy have no clue about what just happened.

Examples like this are countless.  QQ, the predecessor to WeChat was carved out of the telecom industry, because the telecom monopolies were trying to protect their own ability to charge people a lot of money just for texting. 

Innovative companies, protected from foreign competition, yet with a wide open space to dominate almost any domestic industry they choses to enter because the establishment companies don't know how to compete.  WeChat is so dominant in cell phones in China that Apple doesn't get its way when negotiating with Tencent on revenue share.  The stat owned enterprises, meanwhile just hide behind the regulatory walls and collect their rent rather than trying to compete for the future.

These companies are very much in a different league.  Risks are mostly political (like the FANG stocks face in the US today), rather than anything some other businesses can put up.  I don't know whether the Chinese government will allow these companies to continue taking large sections of industries in the fashion that they have been doing, but certainly on historical track record, or future prospects, these companies are probably as good as it gets on the Chinese playground. 

I happen to be biased against Baidu because of its business practices and its image in China is simply not as pristine as Alibaba and Tencent.  With those two though, the world is their oyster.