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MarketScreener Homepage  >  Equities  >  Hong Kong Stock Exchange  >  Tencent Holdings Limited    700   KYG875721634

TENCENT HOLDINGS LIMITED

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Ant Group's $35 billion IPO unlikely to be hurt by possible U.S. curbs, analysts say

10/11/2020 | 12:48am EST
FILE PHOTO: Alipay logo is pictured at the Shanghai office of Alipay, owned by Ant Group which is an affiliate of Chinese e-commerce giant Alibaba, in Shanghai

(This story corrects paragraph 2 of Oct. 8 story to say Trump administration officials, not Trump, are considering the move)

By Scott Murdoch and Julie Zhu

HONG KONG (Reuters) - Ant Group's $35 billion initial public offering (IPO) is unlikely to suffer from any U.S. restrictions on the Chinese financial technology giant due to its very limited overseas presence, potential investors and analysts said.

Trump administration officials are considering curbs on Ant, an affiliate of Chinese e-commerce firm Alibaba, and Tencent over concerns their payment platforms threaten national security, Bloomberg News reported on Wednesday.

If implemented, the restrictions would illustrate how Trump's administration is seeking to prevent Chinese companies from embedding themselves in the U.S. financial system before they become a significant competitive threat.

Ant said it was not aware of any discussions within the administration about restrictions. Tencent and the White House did not immediately respond to requests for comment.

Ant is working towards a dual-listing in Shanghai and Hong Kong possibly as soon as this month in what sources have said could be the world's largest IPO, surpassing oil giant Saudi Aramco's $29.4 billion float in December.

Ant's Alipay and Tencent's WeChat payment platforms are used primarily by Chinese citizens with accounts in renminbi. Most of their U.S. interactions are with merchants accepting payments from Chinese travelers and businesses in the country.

"Basically the overseas revenue accounts for maybe 5% or less for Ant Group. That means for the U.S. revenue contribution it would be even less than that," said Morningstar senior equity analyst Chelsey Tam.

"I'm sure investors will ask about it during the roadshow but it's quite easy for investors to understand that if Alipay and Wechat Pay go overseas the U.S. is probably not the top priority," Tam said.

Ant, which makes 95% of its revenue in China, is seeking to raise about $35 billion in an IPO after assessing early investor interest and based on a valuation of about $250 billion or more, Reuters has reported.

An official at a state-backed Chinese fund, a potential investor in an Ant IPO, said he was not worried about the planned U.S. restrictions as the market only accounted for a tiny portion of the company's overall business.

The official declined to be named as he was not authorised to speak to the media.

"The ban is more about stopping Ant from expanding in the U.S. in the future, but that shouldn't have an immediate impact on the valuation as there is lot more growth left for Ant in China," said LightStream Research analyst Supun Walpola, who publishes on the Smartkarma platform.

(Reporting by Scott Murdoch and Julie Zhu; Additional reportng by Kane Wu; Writing by Sumeet Chatterjee; Editing by David Clarke)


© Reuters 2020
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TENCENT HOLDINGS LIMITED 2.61% 589 End-of-day quote.56.82%
WTI 1.93% 46.53 Delayed Quote.-28.04%
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Financials
Sales 2020 481 B 73 547 M 73 547 M
Net income 2020 128 B 19 586 M 19 586 M
Net cash 2020 71 088 M 10 876 M 10 876 M
P/E ratio 2020 37,6x
Yield 2020 0,27%
Capitalization 4 730 B 723 B 724 B
EV / Sales 2020 9,69x
EV / Sales 2021 7,70x
Nbr of Employees 77 592
Free-Float 60,4%
Chart TENCENT HOLDINGS LIMITED
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Tencent Holdings Limited Technical Analysis Chart | 700 | KYG875721634 | MarketScreener
Technical analysis trends TENCENT HOLDINGS LIMITED
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Income Statement Evolution
Consensus
Sell
Buy
Mean consensus BUY
Number of Analysts 50
Average target price 577,06 CNY
Last Close Price 497,11 CNY
Spread / Highest target 44,4%
Spread / Average Target 16,1%
Spread / Lowest Target -28,9%
EPS Revisions
Managers
NameTitle
Hua Teng Ma Executive Chairman & Chief Executive Officer
Chi Ping Lau President & Executive Director
Yu Xin Ren COO & President-Interactive Entertainment Group
Shek Hon Lo Chief Financial Officer & Senior Vice President
Chen Ye Xu Chief Information Officer
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