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

TENCENT HOLDINGS LIMITED

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Tencent Powers Up With a Game-Streaming Super Platform -- Heard on the Street

10/13/2020 | 07:09am EST

By Jacky Wong

Tencent is already very dominant in mobile games, but a game-streaming giant under its control is a nice power-up--and could be a new way for the company to promote its own content.

Chinese game-streaming platforms Huya and Douyu, equivalents of Amazon's Twitch in China, have agreed to merge in an all-stock deal Monday to create a $10 billion industry giant. Tencent, a substantial shareholder of both companies, will have a 67.5% voting right in the combined company. Huya and Douyu, which have more than 330 million monthly active users who watch top gamers play videogames on their platforms, together have more than 80% of China's game-streaming market. There is likely some overlap between their user bases, but the combined company will without a doubt be the biggest game-streaming platform in China. Tencent will also fold its smaller platform, Penguin e-Sports, into the combined company.

A growing esports market clearly appeals to Tencent: Huya and Douyu's revenue have both grown more than 40% in the first six months of 2020 from a year earlier, with the pandemic helping drive bored homebound people to their platforms. Combining Huya and Douyu will give the new company better bargaining power: a big part of their costs is incentives and bonuses for the best streamers.

With a bigger user base and a backer like Tencent, the combined company may be able to explore new ways to make money from their audience too. Both Huya and Douyu make most of their money from fans buying virtual gifts for their favorite players. That's unique to the Chinese market: Platforms like Twitch and YouTube make money mostly from advertising or subscriptions.

The merger will also help fend off competition from new entrants like Bytedance, the owner of TikTok, and Bilibili, which counts Sony as its shareholder. These companies, which have attracted many young users, are competing for eyeballs for game-streaming specifically and also online entertainment more broadly.

A dominant platform will mean more than just more revenue from game streaming. Tencent could use the platform to promote its own games, keep gamers playing and distribute new games. That could be the bigger game Tencent is playing.

Write to Jacky Wong at JACKY.WONG@wsj.com

(END) Dow Jones Newswires

10-13-20 0708ET

Stocks mentioned in the article
ChangeLast1st jan.
BILIBILI INC. -3.25% 60.82 Delayed Quote.226.64%
HUYA INC. -2.76% 20.12 Delayed Quote.12.09%
SONY CORPORATION -1.10% 9704 End-of-day quote.31.12%
TENCENT HOLDINGS LIMITED -3.43% 563 End-of-day quote.49.89%
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Financials
Sales 2020 481 B 73 229 M 73 229 M
Net income 2020 128 B 19 501 M 19 501 M
Net cash 2020 71 088 M 10 829 M 10 829 M
P/E ratio 2020 37,0x
Yield 2020 0,28%
Capitalization 4 661 B 709 B 710 B
EV / Sales 2020 9,55x
EV / Sales 2021 7,59x
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
Short TermMid-TermLong Term
TrendsNeutralBullishBullish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus BUY
Number of Analysts 50
Average target price 577,06 CNY
Last Close Price 489,92 CNY
Spread / Highest target 46,5%
Spread / Average Target 17,8%
Spread / Lowest Target -27,9%
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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