There are currently 73 mobile games in Tencent's pipeline, with about 50% of them having been approved by China's media regulator, National Press and Publication Administration ("NPPA"). I think that we will see some game launches that will be material enough to accelerate domestic game revenue growth. Top 10 mobile games in China as of November ( Data.ai) New game launches in 2023
In January 2023, some of the legacy game names of Tencent re-emerged in the top 10 ranking like CrossFire Mobile which was ranked sixth and Naruto Mobile which was ranked seventh. LoL: Wild Rift is the third most profitable title published by Tencent in domestic market, which ranked sixth locally. Honour of Kings and Peacekeeper Elite have maintained their dominance in China's gaming landscape as they have maintained their top one and two positions in both October and November of 2022. Mobile games updateīased on the latest data from data.ai, Honour of Kings, Peacekeeper Elite and LoL: Wild Rift continue to rank amongst the top 10 domestic games in China. It has one of the world's largest online communities, with its WeChat alone having more than 1 billion active monthly users, and Tencent Video having 900 million monthly active users. The company has businesses spanning across multiple industries including online games, social networking, online advertising, cloud and fintech, amongst others. Tencent was founded in 1998 and it is one of the leading internet companies in China. Today, in this article, I aim to explain to you why I think that 2023 will be a comeback year for the company and that Tencent's valuation continues to look compelling today even after the rally in the start of the year. I have recently told members of Outperforming the Market that I see 2023 to be a strong year for Tencent and created a buy trigger for members to enter a long position into the company if they have not yet done so.
The icing on top of the cake is management's consistent buyback strategy, which has bolstered the company's stock price at trough valuations. Finally, Video Accounts will help monetize WeChat further and along the way, improve user engagement and bring more opportunities for Tencent's WeChat.
Furthermore, as the macroeconomic environment improves as consumer and business sentiment normalize after relaxation of covid-19 restrictions, along with other fundamental drivers, I expect Ads revenue growth to accelerate in 2023. With more games in its pipeline approved and ready to be released, we could see domestic game launches and revenue accelerate in 2023.
Wechat stock drivers#
There are multiple fundamental growth drivers accelerating for Tencent in 2023. Tencent's WeChat offers a very sticky mobile user base that brings strong monetization opportunities in the form of mobile payments, mobile gaming and mobile advertising.Ģ023 will be a strong year for Tencent, in my view. Tencent is well positioned in a world where everything is done on mobile platforms in China with the significant internet growth over the past few years. Most importantly, there are signs that the regulatory crackdown on technology in China is easing (subscription required).Īs a result of these factors, I do think that it's time for international investors to relook into Tencent ( OTCPK:TCEHY) Investment thesis Furthermore, consumption (subscription required) is expected to drive growth as the Chinese government looks to accelerate growth as covid-19 restrictions are lifted. In the recent inflation print, the consumer price index in China rose by only 1%, the lowest in a year. China seems to be moving in opposite direction from the western world as inflation seem to be kept in check while consumption is expected to recover.
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