The announcement of Tencent Holding Co., Ltd. on September 7th revealed that it had repurchased 22,700 shares at 310.80-311.60 yuan on the same day, involving funds of about 7.072 million yuan. According to the Hong Kong Economic Times, this is the first time Tencent has repurchased shares in four years. According to the report, Tencent's last repurchase was in April 2014, when global network stocks fell sharply, and Tencent spent about 70 million yuan to buy back. Sina Technology quoted the First Financial Daily as saying that in the week of April 15, 2013, Tencent had thrown 600 million yuan to buy back shares in five days, and the repurchase amount was almost 30 times that of the whole year of 2012.
The following is the announcement of the repurchase of shares on April 7, 2014, which was reviewed by Wall Street. The repurchase amount was stated as HKD, and the repurchase was denominated in RMB:
After the repurchase news was announced, Tencent's ADR share price in the US stock market OTC market went up from a downtrend, up 1% in intraday trading, approaching US$41. Then turned around and fell, the deepest drop of 1.2% in the session, close to the low level at the opening. It eventually closed down 0.15% to $40.45, the lowest since mid-August 2017, and the US stock ADR fell more than 25% during the year.
Tencent, which is known as the Hong Kong stock market, closed up 0.7% on Friday, at 316.8 Hong Kong dollars. This year, it fell more than 33% from its high point. Wall Street has mentioned that on Thursday (September 6), the Hang Seng Index fell below the 27,000-point mark, down nearly 20% from the high of the year; Tencent Holdings fell below the 320-dollar mark and expanded to 4% in the afternoon, since August 2017. The new low, closing market value is less than 3 trillion Hong Kong dollars. Tencent's share price fell by HK$24 or 7.1% on Wednesday and Thursday, and the market value of the two days evaporated by more than HK$228.5 billion.
On the news front, China's regulatory authorities have not restarted online game approval, and last week implemented a program to limit the playing time of underage players, further cracking down on Tencent, which accounts for 41% of total gaming revenue. Citi has recently adjusted Tencent's net profit growth in the third quarter. It is estimated that mobile game revenue may decrease by 6% year-on-year, mainly reflecting factors such as the fading of the gross profit of Tencent's online games, the risk of regulatory tightening and the slowdown in advertising revenue growth.
According to the latest report of the Financial Times, Tencent plans to implement real-name verification for new users from September 15th, and compare its identity with the public security organs to determine whether users are underage. This will limit the number of children under 12 years of age. The game time is less than one hour, and older children play up to two hours before the game is automatically turned off.
Wall Street’s all-weather technology mentioned that Tencent’s second quarter of this year saw the first quarterly profit decline in the past 13 years. Tencent said that “mainly because the popular tactical competitive games have not yet been commercialized and the impact of new game release schedules”, this confirms the previous analyst’s view that the decline in game business revenue is an important reason for the current decline in Tencent’s share price. :
"Tencent's expedition, the grass is not alive", was a true portrayal of Tencent games. After replacing Shanda Games as the largest game platform in China in 2010, through a series of investment cooperation, Tencent completed the layout in the fields of game development, live broadcast, e-sports, literature, animation, etc., and the game category has become more and more perfect.
It can be said that the past seven years are the seven years that Tencent Games dominated China's online games. Nowadays, with the slowdown of the growth of game users, the performance of new games is weak, and the regulation of games is becoming stricter. The good times of Tencent games seem to have become a thing of the past.
Similar to the 2013 earnings report due to slowing growth and “WeChat charges”, rumors of fermenting and multi-day repurchase, and the reason for launching repo in 2014 against global technology stocks, Tencent generally chose to be In the case of undervaluation, repurchasing stocks can boost market confidence through lower costs. On the other hand, it is expected to obtain higher returns after the stock price rebounds in the future. At the same time, repurchasing stocks will help optimize the shareholding structure to further enhance investment. Confidence.
Interestingly, just two hours before Tencent announced the repurchase news, on the evening of September 7, Alibaba Group also announced that it will continue to buy back shares from the open market to implement a share purchase plan formulated by the company in 2017. At that time, it announced the launch of a two-year, $6 billion share repurchase.
In 2016, Alibaba repurchased and cancelled approximately 27 million shares at a price of US$2 billion, a large part of which came from the early investor Softbank Group. In 2015, a total repurchase plan of US$4 billion was also launched. Ma Yun, Chairman of the Board of Directors of Ali Group, and Cai Chongxin, Vice Chairman of the Board of Directors, jointly repurchased shares. Some analysts believe that Alibaba's continued heavy repurchase of stocks shows confidence in the company's future growth.