Recent Buy – Tencent Inc. $TCEHY

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I have my skeptical opinions on Chinese company, but with a huge growth factors in tech in China population of 2 Billions, you bet they’ll find ways to profit. Although, my main focus is on dividend paying stocks, occasionally, I’ll do some swing trading. (I’m pretty bad at swing trading, but because I play Fortnite, the game, and seeing how good it is, I’m bought.) And Charlie, from suredividend, told me Tencent pay an annual dividend, so it’s a plus. I missed out the June payout of this year, but next year, I should get some dividend.

Investors have attempted to compare the Chinese B.A.T. names to their American F.A.N.G. counterparts. In this comparison, Baidu is thought of as the Chinese Google (GOOGL), Alibaba, the Chinese Amazon (AMZN), and Tencent, the Chinese Facebook (FB).

Some compelling reasons to buy Tencent

Diversifying portfolio holding… I think they’re trying to model Warren Buffett with a modern philosophy

  1. $TCEHY was buying stakes in TeslaActivision Blizzard, and Snap
  2. WeChat
  3. Tencent is also the world’s largest gaming company, with games including Honor of Kings and League of Legends.
  4. Chart of Tencent revenue streams since 2014
  5. Incredible balance sheet strength

    None of these ventures would mean anything, however, if Tencent didn’t have the financial fortitude to attempt to tackle such ambitious projects. On that front, however, Tencent has enviable strength.

    Cash Debt Free Cash Flow
    $48 billion $21 billion $15 billion

     

  6. Dividend history is 35% growth
Ex-Date Record Date Pay Date Declared Date Type Amount
05/17/2018 05/18/2018 06/18/2018 05/17/2018 Normal 0.1121
05/17/2017 05/19/2017 06/19/2017 04/13/2017 Normal 0.0783
05/18/2016 05/20/2016 06/17/2016 03/24/2016 Normal 0.0605
05/13/2015 05/15/2015 06/15/2015 04/29/2015 Normal 0.0464
05/14/2014 05/16/2014 06/16/2014 06/06/2014 Normal 0.0310
05/16/2013 05/20/2013 06/14/2013 05/01/2013 Normal 0.0258
05/16/2012 05/18/2012 06/14/2012 05/01/2012 Normal 0.0173
04/29/2011 05/03/2011 06/10/2011 03/18/2011 Normal 0.0141

At some point the dividend growth would probably slowing down, but for now, it’s pretty convincing to buy?!! LOL 🙂

7. The fact that they own 40% of EPIC which offer Fortnite, the game, as a free game and makes a tons of money is totally revolutionary. They make so much money, that I don’t think they’ll ever make the game off “beta”.

Which makes it wildly popular. It doesn’t cost the player a penny to buy the game, but the micro-transaction of buying a dance for $2, or an OMEGA or John Wicks outfit for $10, makes $0.5B in revenue last year, and this year they have not released any detail on earnings, my guess is that number should double or quadruple. Check out the headlines: With ESTIMATIONS… no real number from the companies.

Fortnite made nearly $300 million in the month of April – The Verge

Fortnite generated a record $318 million in revenue in May – Recode

Fortnite now has 125 million total players | PCGamesN

Fortnite Has Over 40 Million Monthly Active Users – MMOs.com

 

This is what it does it is #1 competitor: (This competitor is also owns by Tencent, so …. it’s not really helping. But …

PUBG’s Average Users Down 44.7% for 2018 as Fortnite Takes Over …

 

The people that I’ve been playing game with has already bought the season pass for Season 5, they also bought a tons of skins (outfit) and dance moves. I know they bought them because they are still low level, but they’d spend $100 to maxed out everything LOL 🙂

Fortnite Season 5 – introduced golf cart riding – imagine riding the golf cart with 3 people sticking out the gun and shoot everywhere, doing donuts, riding to the top of the mountain, and flying down without getting injured … hahah… a whole bunch of silly stuffs that you can do.

They also introduce a little bit of basketball, and golf in the game, which might have potential to lighten up the game for younger players.

They do know how to keep players engaged.

***I can’t wait until EPIC go public…. they just might! When they start releasing “SAVE THE WORLD” where everyone working together to kill zombies, and zombie BOSSES (I made the zombie boss part up) to make it more fun. LOL 🙂

For that I bought 100 shares of Tencent for $48.xx dividends at $0.11/year.

Some bigger risks – US-China trade relation, but it shouldn’t affect tech companies as much.

1 Comment

  1. Congrats on the purchase. Be interesting to see how the upcoming spin of the music segment (to be listed in the US) is handled. Other risks I would list (though not currently likely) would be currency controls or devaluation. I have them on my watch list.

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