This time with four of the big Chinese tech companies. Cumulative Growth of a $10,000 Investment in Stock Advisor, 4 Reasons NetEase Outperformed Tencent in 2019 @themotleyfool #stocks $NTES $TCEHY $BIDU $ATVI $WB, NetEase (NTES) Q4 2020 Earnings Call Transcript, NetEase's Streaming Music Business Deserves a Closer Look, 3 Reasons NetEase Is Still a Top Chinese Tech Stock to Own, NetEase (NTES) Q3 2020 Earnings Call Transcript, Copyright, Trademark and Patent Information. It allows you to run various Android-based mobile games and apps on PC once installed. Baidu's ad revenue, which accounted for 73% of its sales, dropped 9% annually last quarter. Tencent attributed that slowdown to sluggish ad sales on Tencent Video, but it's also likely struggling with competition from Gen Z-oriented rivals like ByteDance. Those moves all make it easier for investors to understand NetEase's business than Tencent's. Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer. NetEase also got some help thanks to the weakness in Baidu in the past year. In the second quarter, Tencent’s gaming revenue jumped 40% to 38.3 billion yuan, accounting for one-third of total revenue. For non-personal use or to order multiple copies, please contact Dow Jones Reprints at 1-800-843-0008 or visit www.djreprints.com. Purchase the outfit to get a Five of the top 10 billing mobile games in 2016 were from Tencent. We've detected you are on Internet Explorer. For context, Tencent’s WeGame dominates China’s PC gaming platform sector (300+ million registered users & 80 million MAUs), and Steam sits in NetEase's gaming revenue rose 11% annually last quarter. That slowdown is causing many companies to cut their advertising budgets. For the fourth year running, Chinese tech giants Tencent and NetEase have hung on to the No.1 and No.2 spots, respectively. Tencent also pays a tiny forward dividend yield of 0.6%. In October 2015, NetEase Cloud Music and Tencent Music reached a strategic copyright agreement. NetEase has shown surprising strength in mobile gaming. The stock spiked to a new high after stronger-than-expected earnings in the March quarter. https://www.barrons.com/articles/tencent-vs-netease-let-the-games-begin-1496104720. But there’s far more to Tencent than its core gaming business. Let's examine four key reasons the underdog outperformed the market leader, and why that trend could continue in 2020. Tencent Copyright ©2021 Dow Jones & Company, Inc. All Rights Reserved. Universal Music Group (UMG) announced Monday that it has signed multi-year direct licensing agreements in China with both Tencent Music Entertainment (TME) and … Analysts expect Tencent's earnings to rise 15% this year and 22% next year, which are reasonable growth rates for a stock that trades at 26 times forward earnings. Tencent, Baidu, Netease and Sina corp. all have their hands in all thing inter... Stock-showdown is back! Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. NetEase, Tencent gross three-quarters of a billion for first-half 2019 in China [Niko Partners] Revenue for Tencent and NetEase make up well over half … Pan expects mobile games to be the main growth driver in coming years as popular PC titles move to the smaller screen format, while the addition of more premium content will lift average revenue per user. NetEase ranks fourth among active users after Tencent’s three services, the analysts added. It sold its online comics unit to Bilibili, sold its Kaola e-commerce platform and a stake in its streaming music platform to Alibaba, and spun off its education unit Youdao in an IPO. Tencent’s 935 million users of its NetEase, however, streamlined its business over the past year. NetEase remains the second-largest game publisher in China after Tencent, and video games generally hold up better than digital ads during economic downturns. 知られざるアジアNo.1企業「テンセント」の強さを探る 株価300倍に成長した中国の巨人 世界で一番大きな会社はどこかご存知ですか？ 答えはアメリカの「アップル」、次いでGoogleの持ち株会社である「アルファベット」、そして「マイクロソフト」と続きます（記事執筆時の時価総額よ … China has overtaken the U.S. to become the world’s largest online gaming market. NetEase launches Fever Game, its own digital distribution platform in China. NetEase MuMu (Android Emulator) is a high-quality game service platform officially launched by NetEase. WeChat NetEase’s gaming revenue increased 21% to 13.8 billion yuan, or 80% of total revenue. Therefore, investors who were burned by Tencent's ongoing ecosystem war against Baidu and Alibaba likely gravitated toward NetEase as a safer Chinese tech play. (NTES) to continue to nab market share given their strengths in content production and distribution. While NetEase saw its share price rise 36.1 percent over the past … NetEase has a strong pipeline of 17 new mobile titles launching this year and next, although there will be competition from Tencent’s strong lineup of upcoming titles. Leo is a tech and consumer goods specialist who has covered the crossroads of Wall Street and Silicon Valley since 2012. Tencent shares are up 45% this year and trade at 36 times forward earnings. Recent statistics for Xiami’s monthly active userbase weren’t available. Its battle royale game Knives Out is also one of the highest-grossing iOS games in Japan. Its blockbuster Onmyoji game has helped reaccelerate mobile gaming revenues and the company is set to introduce new content to the Japanese version of the game to boost monetization. The Chinese economy is growing at its slowest rate in about three decades, and the U.S.-China trade war and tariffs are exacerbating the pain. As a result, many top advertising platforms -- including Baidu (NASDAQ:BIDU), Weibo (NASDAQ:WB), and Tencent -- struggled with slow ad growth in recent quarters. As a leading games developer, NetEase also has a wealth of intellectual property it could tap into for other products such as films and merchandise. That marked the unit's slowest growth in five quarters, but still matched Tencent's 11% growth in … Xu has a buy rating on the stock with an HKD310 a share target price, which implies 12% upside. Its core video game business, which generated 79% of its revenue last quarter, is smaller than Tencent's, and its top mobile games still can't top Tencent's flagship title Honor of Kings in China. Tencent, Alibaba, Baidu and NetEase Rumored to Return to A-Shares through CDR Categories: Industry NetEase Posted on March 5, 2018 July 21, 2020 The companies include BATJ (Baidu, Alibaba, Tencent, and JD.com), Ctrip, Sina Weibo, NetEase and Sunny Optical Technology. However, Tencent and NetEase released their own hard-hitting products, including QQ Speed, MU, Chu Liuxiang, and Knives Out that fundamentally promoted game profits. For the first time in nearly a year, Chinese regulators approved games from online giants Tencent and NetEase, but none was a major title. The P/E for NetEase stands at just under 26. Tsang has a buy rating on NetEase with a $307 a share target price. (700.HK) and China’s antitrust authorities had The success of Game For Peace - Known as PUBG Mobile out of China - has been cited as a major factor in Tencent's success. Tencent generates most of its revenue from video games and online ads, but it's also growing its cloud and fintech businesses, expanding into virtual assistants and connected devices, and investing in a growing list of domestic and overseas companies. According to the feedback forum and users, is under the frame of singer Vincy Chan, including Janice M. Vidal, Joey Yung, Zhang Jingxuan, Yoga Lin, May day, the affected tracks NetEase accounted for about 1% of total cloud … China Ends Freeze on … UBS analyst Ming Xu expects Tencent to capture increasing share of time spent online by Chinese netizens. For the best Barrons.com experience, please update to a modern browser. NetEase also recently approved a special dividend, which temporarily boosts that yield to 2.4%. According to App … It also trades at a reasonable 19 times forward earnings, but it pays a higher forward yield of 1.3%. Weibo's ad revenue, which accounted for 88% of its top line, grew just 1% last quarter. Tencent Music is the exclusive agent of YG Entertainment In order to consolidate its copyright advantage, Tencent repeatedly sued NetEase Cloud Music since 2014, accusing the latter of infringement and forcing NetEase Cloud HSBC analyst Chi Tsang says NetEase continues to extend the life and improve the monetization of its games. Analysts forecast higher growth next year for Tencent (38.2% vs… This copy is for your personal, non-commercial use only. While the acquisition of Finland-based Supercell, the developer of Clash of Clans, bulked up its presence in gaming, Tencent’s first self-developed title, Honor of Kings, provided a big boost to its March quarter revenues. It called PUBG’s suit a “shameless attempt” to use copyright law to monopolize the battle royale Leo Sun (TMFSunLion) Updated: Apr … Tencent's ad revenue, which accounted for 19% of its sales, rose 13% annually last quarter but marked a significant slowdown from its previous quarters. NetEase still has a long pipeline of games to boost its growth, including Cyber Hunter, Xuan Yuan Sword: Dragon Upon the Cloud, Bloom & Blade, and Activision Blizzard's World of Warcraft Classic and Diablo Immortal. New game launches can drive future growth. Despite those challenges, NetEase's stock rallied nearly 40% this year as Tencent's stock rose less than 10%. As globalization became the trend of the game industry, Tencent and NetEase gradually shifted their focus from the national market to the international field, spending more time and energy on foreign business. Tencent, NetEase and others bring global gamers to fictional worlds like Middle Earth, Westeros, and Hogwarts to dominate the mobile games industry China’s gaming giants and … NetEase (), also a leader in gaming, reports after the close. online entertainment and content powerhouse. By comparison, Tencent's operating margin plunged 800 basis points annually to 26.6% last quarter as it ramped up its investments. UOB Kay Hian analyst Julia Pan expects the market to grow, albeit at a slower pace, to $30 billion by 2018. Streamlining its business, cutting costs, and dumping weaker units also boosted NetEase's operating margin 350 basis points annually to 22.8% last quarter. Tsang expects NetEase’s promising games pipeline to drive 24% average annual revenue growth in the next three years and sees the company becoming a leader in augmented reality and virtual reality games. NetEase doesn't generate significant revenue from online ads. NetEase is expected to post 130% earnings growth this year (thanks to its spin-offs and divestments), followed by 7% growth next year. Image source: NetEase. Star Child: The all new outfit, Star Child, is now available for purchase in the Mall. We’re motley! Sales of online games have grown in China at an average 28% annual pace since 2011 to $26 billion last year. Tencent publishes three of the top 10 highest-grossing iOS games in China, according to App Annie, but NetEase publishes four: Onmyoji, Immortal Conquest, and two titles from its Fantasy Westward Journey franchise. Returns as of 03/05/2021. Distribution and use of this material are governed by our Subscriber Agreement and by copyright law. But at … The company was founded in 1997 by Ding Lei. Stock Advisor launched in February of 2002. The stock trades at 18 times forward earnings and pays a 1.3% dividend yield. Mobile gaming has been a bright spot for Tencent – the world’s largest games company by revenue - and is expected to continue to grow strongly this year as it rolls out an impressive pipeline of new mobile titles. It also restructured its business from four segments to three: gaming, Youdao, and innovative businesses and others. Therefore, investors who preferred a more direct investment in China's gaming market -- which finally passed some major regulatory challenges last year -- likely preferred NetEase to Tencent. Both Tencent and NetEase are still solid long-term plays on China. The music copyright dispute of NetEase and the Tencent, you Changba me play Since August, some NetEase cloud music Taiwan singer music suddenly "gray" off the shelf. To order presentation-ready copies for distribution to your colleagues, clients or customers visit http://www.djreprints.com. An error has occurred, please try again later. Tencent Music’s shares dropped 2% in New York, but its parent gained 3.5% in Hong Kong after falling two straight days. This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. NetEase generates most of its revenue from video games, but Tencent's gaming unit only generated 29% of its revenue last quarter. Four of the top billing mobile games in 2016 were from NetEase. Copyright ©2021 Dow Jones & Company, Inc. All Rights Reserved. NetEase's gaming revenue rose 11% annually last quarter. The move gives NetEase new ammunition in a fight against Tencent. However, NetEase's lower valuation and higher yield -- which complement its aforementioned strengths -- suggest that it could continue to outperform Tencent next year. While growth for PC games will slow, the format offers ample room for monetization, long life cycles and high entry barriers. The company is building on its strength in gaming to become an online entertainment and content powerhouse, as Barron’s Asia highlighted last week. That low exposure to the fickle ad market likely makes it a more appealing investment than Tencent. NetEase has replaced Tencent as the top mobile publisher by revenue worldwide as the company’s apps continue to grow in China. Comments? The unit generated just 3% of its revenue in the second quarter, and it stopped disclosing its ad sales separately in the third quarter. More information + Maintenance Update 2/25 [Lantern Festival Training] 1. NetEase Challenges Tencent Music With a Korean Music Deal But it still faces an uphill battle against the market leader. His wheelhouse includes cloud, IoT, analytics, telecom, and gaming related businesses. Tencent trades at over 37 times earnings. In response, NetEase argued in its motion to dismiss that a single company cannot monopolize the entire “battle royale” genre. Tencent shares are up 45% this year and trade at 36 times forward earnings. messaging app provide ample room to monetize traffic through advertising and grow new businesses like online payments. NetEase, Inc. (simplified Chinese: 网易; traditional Chinese: 網易; pinyin: WǎngYì) is a Chinese Internet technology company providing online services centered on content, community, communications, and commerce. Enjoy a limited-time discount during the event. The strength of these games indicates that NetEase isn't losing the gaming market to Tencent. Pan expects industry leaders Tencent and NetEase dominate China’s online games market and they’re betting new games will help win the battle for eyeballs and power their earnings to a new level. Tencent Music offered the sub-licensing of 1.5 million songs to NetEase Cloud Music. NetEase (NASDAQ:NTES) was founded in 1997, predating Tencent (OTC:TCEHY) by a year, but it's often overshadowed by its larger rival. Market data powered by FactSet and Web Financial Group. You may call IGG a poor man's alternative to mobile game leaders Tencent Holdings (700.Hong Kong/TCEHY) and U.S.-listed Netease (NTES). Address NetEase Bldg 599 Wangshang Rd Binjiang … Follow him on Twitter for more updates! This copy is for your personal, non-commercial use only. Tencent is a gaming titan and its big user base provides plenty of upside. A common criticism of Tencent is that the company's diversification dilutes its focus. The government's tighter oversight of gaming, fintech, and healthcare companies is also throttling ad sales to those markets. NetEase expands its businesses to Japan, North American, and other other international markets. That marked the unit's slowest growth in five quarters, but still matched Tencent's 11% growth in gaming revenue in the third quarter. Even after the recent rally, IGG trades at … NetEase E-mail us at asia.editors@barrons.com.