Trinity Investments Limited – Tencent to Report Q3 Earnings on Wednesday

HONG KONG - Nov. 11, 2018 - PRLog -- In the last reported quarter, Tencent reported earnings of 32 cents per share.

Revenues of $11.14 billion increased 30% year over year. The increase can be primarily attributed to robust performance from payment related services, digital content subscriptions and sales, social and others advertising, and smart phone games.

Estimates for third-quarter earnings has remained steady at 28 cents over the past seven days. The consensus mark for revenues currently stands at $11.66 billion, reflecting year-over-year growth of 19.3%.

Let's see how things are shaping up for this announcement.

Key Factors to Watch For

Tencent has significant depth in its gaming portfolio that coupled with strong distribution capability is expected to drive growth. Strong adoption of new role-playing games (RPG) such as MT4 and Saint Seiya, which generates higher average revenue per user (ARPU), is expected to boost gaming revenues in the to-be-reported quarter.

Moreover, Tencent's focus on expanding into international markets based on games like Arena of Valor and PUBG mobile is a major growth driver.

The company's initiative to expand the capabilities and usage of Mini Programs by integrating them with digital tools like Weixin Pay is expected to boost developer and customer base. Moreover, improving user engagement level is a key catalyst.

Further, momentum in cloud services revenues is expected to continue due to fast penetration into key sectors, including finance, Smart Retail and municipal services. Additionally, strength in video advertising is noteworthy.

However, Tencent is expected to be negatively impacted by the loss of payment-related interest income due to regulations. Additionally, advertising revenues are expected to be negatively impacted by lower spending and increasing regulations key verticals like mobile gaming and web payments. A tough regulatory environment in the gaming market is expected to remain an overhang on the stock in the near term.

There is also the Tencent Music Entertainment IPO, anticipated to list in December. TME has been directly compared to Spotify by many industry insiders, however its profitability is significantly higher and more robust than its supposed competitor.

To find out more about the Tencent Music IPO or other opportunities Trinity investments see's in the markets, visit www.trinity-investments.com  or email us at info@trinity-investments.com and we will happily get back to you.