Advertisement
UK markets close in 22 minutes
  • FTSE 100

    7,966.31
    +34.33 (+0.43%)
     
  • FTSE 250

    19,895.75
    +85.09 (+0.43%)
     
  • AIM

    743.80
    +1.69 (+0.23%)
     
  • GBP/EUR

    1.1698
    +0.0029 (+0.25%)
     
  • GBP/USD

    1.2628
    -0.0010 (-0.08%)
     
  • Bitcoin GBP

    56,286.27
    +1,506.12 (+2.75%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • S&P 500

    5,251.65
    +3.16 (+0.06%)
     
  • DOW

    39,782.97
    +22.89 (+0.06%)
     
  • CRUDE OIL

    82.64
    +1.29 (+1.59%)
     
  • GOLD FUTURES

    2,235.90
    +23.20 (+1.05%)
     
  • NIKKEI 225

    40,168.07
    -594.66 (-1.46%)
     
  • HANG SENG

    16,541.42
    +148.58 (+0.91%)
     
  • DAX

    18,497.19
    +20.10 (+0.11%)
     
  • CAC 40

    8,210.35
    +5.54 (+0.07%)
     

Tencent Partners With UnionPay to Merge QR Code Systems

Tencent Holdings TCEHY is reportedly working to unify its QR code system for mobile payments with China UnionPay.

Per Bloomberg, the common QR code system will allow Tencent and UnionPay customers to transfer or spend money using the same smartphone symbols.

This is likely to help the Chinese central bank-backed UnionPay network get a bigger footprint in the $27 trillion payments market, currently dominated by Tencent’s WeChat
Pay and Alibaba BABA affiliate Ant Financials’ Alipay.

The unified QR code system is reportedly being tested on Android devices in eastern China’s Fuzhou city.

Tencent Holding Ltd. Price and Consensus

Tencent Holding Ltd. Price and Consensus
Tencent Holding Ltd. Price and Consensus

Partnership to Aid Fintech Growth

The partnership is in line with Tencent’s efforts to develop its fintech business. Notably, the company's fintech arm, Tenpay, is collaborating with UnionPay on relevant fintech services on a trial basis.

In third-quarter 2019, the company generated revenues of RMB 4.7 billion from its fintech and business services segment, up 36% year over year, driven by robust growth of commercial payment transactions as well as commercial payment volumes.

The company is also reportedly creating a new team to gain a foothold in the cryptocurrency market, which per marketstudyreport.com data cited by MarketWatch, is expected to witness CAGR of 11.9% between 2019 and 2025.

Further, the partnership is likely to solidify Tencent’s competitive position in China’s payments market, especially against its rival Alipay.

ADVERTISEMENT

Tencent Hurt by Gaming Regulations in China

Tencent’s performance has been disappointing in recent times. The stock is down 1.5% from its 52-week high price of $52.14 on Apr 10, 2019. The decline can be attributed to increasing regulation on video games by the government.

Chinese officials have been cracking down on online games, with restrictions being placed on the total game time of minors. Moreover, all gamers, regardless of age, are prohibited from playing games that depict sexual explicitness, goriness, violence and gambling.

In such a scenario, Tencent’s expanding Fintech business, bolstered by the recently announced partnership, bodes well for the stock.

Moreover, Tencent recently announced its first major restructuring in six years, which will lead to setting up of a new cloud and smart industries business to take on Alibaba and increased investments in next generation technologies like AI, robotics, and quantum computing.

Zacks Rank & Stocks to Consider

Currently, Tencent carries a Zacks Rank #4 (Sell).

A couple of top-ranked stocks in the broader technology sector include Baidu BIDU and Garmin GRMN. Both sport a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The long-term earnings growth rate for Baidu and Garmin is currently pegged at 2.3% and 7.4%, respectively.

Today's Best Stocks from Zacks

Would you like to see the updated picks from our best market-beating strategies? From 2017 through Q3 2019, while the S&P 500 gained +39.6%, five of our strategies returned +51.8%, +57.5%, +96.9%, +119.0%, and even +158.9%.

This outperformance has not just been a recent phenomenon. From 2000 – Q3 2019, while the S&P averaged +5.6% per year, our top strategies averaged up to +54.1% per year.

See their latest picks free >>

Click to get this free report Alibaba Group Holding Limited (BABA) : Free Stock Analysis Report Baidu, Inc. (BIDU) : Free Stock Analysis Report Tencent Holding Ltd. (TCEHY) : Free Stock Analysis Report Garmin Ltd. (GRMN) : Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research