Is tencent's 360 really expensive? Will there be a new "story" in the next 10 years? (Follow, comment and get 66 points)

Hong Kong Stock King$TENCENT (00700.HK)$2022 Q1 Finance Report Revealed

Having dropped by around 50% from historical highs, Tencent's stock price near 350 Hong Kong dollars

Today, is there a new story to tell?

The answer may lie in the Tencent Holdings' "Tencent Sustainable Social Value Report 2021" released in the past two days.

Ma Huateng said,Tencent is facing a new stage of challenges and development coexisting.On the one hand, the growth rate of income and profit is slowing down; on the other hand,Tencent may leverage this opportunity to create higher-quality development.

As for where to shift to? Liu Chiping pointed out that the new global round of technological and industrial revolution is creating important opportunities and missions to create sustainable social value,Empowering digital technology companies.

01 Tencent's financial report is not short of new stories

Let's first take a brief look at Tencent's financial report:

腾讯2022首季收入为135.47 billion元，同比增长为0%，基本持平，环比变动降低了6%；经调整净利润为25.545 billion元，按年下跌23%，环比提升3%。

当然，1300多亿的营收，仍然显示腾讯这条大船短期在大浪中依然能航行无忧。

利润数据方面，依旧不好看，一是刚性成本很难随着收入增速下滑而跟随减少，二是Q1能兑现的投资收益预期也不高。

这也正应了马化腾自己所说，腾讯的收入和利润增速已经放缓。

但腾讯的换挡动作也在持续发生，继在21年Q4季度，承担腾讯数字经济换挡转型的金融科技和企业服务板块在总营收中占比高达33%，首次超过网络游戏板块（占比约30%），成为腾讯营收贡献最大的业务板块后，

In the first quarter of 2022, Tencent's financial technology and enterprise services segment accounted for 32% of total revenue, essentially on par with the online gaming segment (approximately 32%). Almost firmly securing one of the two profitable horses that can rival Tencent.

After all, following the Spring Festival,The concentrated outbreak of the domestic epidemic after the Spring Festival has to some extent hindered Tencent's performance in the financial technology and enterprise services segment, but it basically indicates that Tencent's gear shifting has been somewhat effective.

To observe the new story of the company,We need to look at the changes in revenue composition, growth rate, as well as changes in profit, revenue, and costs of this business in the financial statements.

From Tencent's historical financial reports, we found,Tencent's explosive growth in the digital economy (financial technology and enterprise services segment) was concentrated in 2021In 2021, the revenue composition of this sector has reached as high as 31%, compared to 27% in the 2020 annual report, an increase of over 4 percentage points. The growth rate has significantly accelerated (enter Tencent stock → click on finance → view revenue composition).

In terms of income costs, Tencent's revenue in this sector increased by 11% year-on-year, partly reflected in the growth of server and bandwidth costs, indicating that Tencent is still intensifying its efforts to deploy the digital economy track.

It should be noted that in the aspect of servers, Tencent Cloud officially launched the 100G cloud server scale for commercial use in July 2021. It is understood that this is the first domestically applied large-scale 100G network cloud server product series.

In terms of data centers, Tencent currently operates over one million servers on the internet, making it the first company in China and the fifth in the world to operate over a million servers.

Investments by Tencent in digital economy can be seen in long-term investments in underlying capabilities such as servers, operating systems, and databases, showing Tencent's gradual improvement in building its self-researched ecosystem to gain market dominance.

Is the digital economy the next decade for Tencent?

How important is the digital economy to Tencent's future? Why not start by understanding the digital economy.

Former Microsoft Chief Strategy Officer, Renowned domestic business consultant Liu Run describes the importance of the digital economy in this way.

Consumption, investment, and exports are just statistical metrics of value creation. The true value creation originates from the abundant supply of the four major production factors: labor, land, capital, and technology. However, all four major factors have encountered bottlenecks.

We urgently need new and potentially enormous production factors to support economic growth.

What will this new production factor be? In April 2020, the Central Committee of the Communist Party of China and the State Council issued the "Opinions on Constructing a More Perfect System of Market-oriented Allocation of Factors". This 'Opinion' for the first time considers data as the fifth major production factor, placing it on par with other traditional factors. These clear definitions and qualifications indicate that we have reached a consensus that this new production factor is: data.

In December 2021, Lin Yifu, Dean of the New Structural Economics Institute at Peking University, said in an interview:The digital economy is a core component of the Fourth Industrial Revolution, presenting China's opportunity to 'overtake on the curves' in the Fourth Industrial Revolution.

At the 'Promoting the Continuous and Healthy Development of the Digital Economy' special consultation meeting held in Beijing on the 17th, Liu He, member of the Political Bureau of the Central Committee of the Communist Party of China and Vice Premier of the State Council, also mentioned that the global digital economy is presenting new features like intelligence, quantum, and cross-border integration.Efforts should be made to adapt to the all-round changes brought by the digital economy, fight key battles in core technologies, support the continuous and healthy development of platform economy and private economy, manage the relationship between government and market well, support digital enterprises to go public in domestic and foreign capital markets, promote competition through openness, and promote innovation through competition.

It is evident that the policy winds have started to blow, and Tencent has long been strategically positioned.

Is the valuation of Tencent by 03 360 expensive?

Returning to the stock price itself, if you want to predict the trend of Tencent after its financial report,You might as well observe Tencent's US stock ADR tonight.From the situation in recent years, after Tencent Holdings releases its financial report, during the US trading session on that day, its Tencent Holdings ADR often receives significant news impact causing significant price fluctuations, which typicallyThese fluctuations may subsequently have an impact on the price of Tencent Holdings in Hong Kong stock market the next day after the opening. However, this impact does not necessarily aim to eliminate price differences.The linkage of the above stock prices is not absolute, but investors still need to pay close attention.

On the other hand, as Tencent's overall business continues to improve, its traditional profit model will also undergo testing in a new environment. Therefore, does the valuation system need to be restructured?

In terms of PE ratio, based on the profit estimate for 2021, Tencent's latest valuation is only 12.5 times. Valued by PS ratio, Tencent is currently only at 5 times, at a historical low, but compared to the revenue growth rate of around 10%, this does not seem very cheap.

Perhaps from the perspective of Hong Kong stock options, through the layout of funds, you can refer to some clues about the market's view on Tencent's stock price.

As of 10:15 am on May 18th, in the call options expiring on May 30th, the variety with the highest turnover is the one with a strike price of 370 Hong Kong dollars, temporarily trading 1.56 million. Next is the variety at 360, trading 0.68 million, while in the 380-410 range, the turnover is relatively small.

At the same time, in the put options expiring on May 30th, the largest turnover is the 350 range, currently trading 2.23 million yuan. Next is the 370 range, trading 0.72 million.

From this, it can be seen that before the unveiling of this financial report, the market funds have maintained a relatively cautious attitude.

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