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Tencent Holdings Limited (0700.HK) Huge Growth Potential Over the Next 10 Years

Tencent Holdings Limited (0700.HK) Huge Growth Potential Over the Next 10 Years

In a recent meeting with Shayne Heffernan CEO and Founder of HEFFX one of the stocks he said worth mentioning was Tencent.

Tencent owns WeChat, the most popular messaging app in China with over 1.16 billion monthly active users. Over the past 3 years, Tencent expanded WeChat into an ecosystem with over 300 million mini Programs for accessing e-commerce marketplaces, ride-hailing services, payments, and other services without ever leaving the app. It additionally holds a near-duopoly in China’s digital payments market with Alibaba-backed AliPay.

Tencent is also the world’s largest game publisher, China’s second-largest cloud platform provider after Alibaba (NYSE:BABA), and also the country’s fourth-largest digital advertising platform. It also owns Tencent Video, a growing list of other mobile apps and investments, and a dominant stake in streaming giant Tencent Music.

That sprawling ecosystem — which is tied together by WeChat, its older messaging network QQ, and its payment service WeChat Pay — shores up Tencent’s defenses against potential rivals like Alibaba and Baidu. Its diversification additionally guarantees that it’ll be a bellwether of the growing Chinese tech sector over the next 50 years.

Tencent’s stock rallied nearly 1,300% over the past decade, however its three core growth engines — gaming, advertising, and fintech and business services — ought to continue growing and generating fresh money for the company to expand into new markets. That ongoing growth may raise the stock even higher over the future.

Shayne Heffernan Trade Idea

“Tencent is worth keeping an eye on especially during the next market downturn. We predict the future price of Tencent will come in around HKD 501.79 which a the current prices will give the stock a price increase of +15.67%.”

Price Performance

Relative Valuation

Technical Indicators

Overall, the bias in prices is: Upwards.

Note: this chart shows extraordinary price action to the upside.

The projected upper bound is: 457.04.

The projected lower bound is: 412.71.

The projected closing price is: 434.88.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 4 white candles and 5 black candles for a net of 1 black candles. During the past 50 bars, there have been 25 white candles and 23 black candles for a net of 2 white candles.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 65.0246. This is not an overbought or oversold reading. The last signal was a sell 1 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 57.53. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 54 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 66. This is not a topping or bottoming area. The last signal was a buy 6 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 3 period(s) ago.

Rex Takasugi – TD Profile

TENCENT closed up 3.800 at 433.800. Volume was 23% below average (neutral) and Bollinger Bands were 34% narrower than normal.

Open     High      Low      Close      Volume
432.000  435.000   428.200  433.800    18,496,804
Technical Outlook
Short Term:        Overbought
Intermediate Term: Bullish
Long Term:         Bullish
Moving Averages: 10-period      50-period       200-period
Close:           426.36         410.41          369.73
Volatility:      34             34              34
Volume:          22,313,862     21,053,636      19,806,722

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

TENCENT is currently 17.3% above its 200-period moving average and is in an upward trend. Volatility is low as compared to the average volatility over the last 10 periods.

Our volume indicators reflect volume flowing into and out of 0700.HK at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on 0700.HK and have had this outlook for the last 2 periods.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of the Hong Kong Stock Market. Trading

Trading and investing carries a HIGH LEVEL OF RISK, you could lose some or all of your investment. Trading commodities or any other financial instrument may not be suitable for all traders.  Before deciding to trade, you should carefully consider your investment objectives, level of experience, and risk appetite.  We accept no liability for any losses or damages you may incur—this means that you alone are responsible for your actions in any trading or investing activities.

HEFFXhttp://www.heffx.com
HEFFX has become one of Asia’s leading financial services companies with interests in Publishing, Private Equity, Capital Markets, Mining, Retail, Transport and Agriculture that span every continent of the world. Our clearing partners have unprecedented experience in Equities, Options, Forex and Commodities brokering, banking, physical metals dealing, floor brokering and trading.

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