Derivatives and Quantitative Strategist

Gaudenz Schneider

Equity Derivatives

<ul>
<li>Over the past five trading days, <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a> multi-leg option strategies showcased a variety of approaches. Strategy highlights and volatility context are provided.</li>
<li>With short-term implied volatility below its median, long volatility strategies dominate, with a balanced mix of bullish and bearish positions. </li>
<li>Open interest spread across monthly and quarterly expiries, with some notable strategies taking advantage of longer expiration dates, and a steep negatively sloped skew $475.</li>
</ul>


Over the past five trading days, Tencent (700 HK) multi-leg option strategies showcased a variety of approaches. Strategy highlights and volatility context are provided.
With short-term implied volatility below its median, long volatility strategies dominate, with a balanced mix of bullish and bearish positions. 
Open interest spread across monthly and quarterly expiries, with some notable strategies taking advantage of longer expiration dates, and a steep negatively sloped skew $475.


Tencent (700 HK): Volatility Plays and Skew Top Trades

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Bottom-Up

<ul>
<li>China announced game approval for the March batch. The number of games approved remained at a higher level than 2023.</li>
<li>The pace of China game approval appears to have accelerated to the same level as pre-tightening. We see pick up in approval rate this month.</li>
<li>Both Tencent and Netease received approval for one game. In addition, Kingsoft received approval for its legendary Sword Heroes series.</li>
</ul>


China announced game approval for the March batch. The number of games approved remained at a higher level than 2023.
The pace of China game approval appears to have accelerated to the same level as pre-tightening. We see pick up in approval rate this month.
Both Tencent and Netease received approval for one game. In addition, Kingsoft received approval for its legendary Sword Heroes series.


Tencent/Netease: One Game Approved Each in March

Blue Lotus Non US Internet research, Blue Lotus Research Institute

Ying Pan

Blue Lotus Non US Internet research

China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

<ul>
<li>Tencent reported C4Q24 revenue, IFRS op. profit, and IFRS net income in-line, (5.3%), 6.0% vs. our est. and 2.1%, (12.6%), 5.3% vs. cons. </li>
<li>We shifted our game TOP PICK from Tencent to NetEase on January 16 2025, due to pipeline gaps. </li>
<li>We reiterate our BUY rating and raise TP to HK$545 on Tencent. We expect game pipeline to fill the gap with the launch of two blockbusters in C3Q25.</li>
</ul>


Tencent reported C4Q24 revenue, IFRS op. profit, and IFRS net income in-line, (5.3%), 6.0% vs. our est. and 2.1%, (12.6%), 5.3% vs. cons. 
We shifted our game TOP PICK from Tencent to NetEase on January 16 2025, due to pipeline gaps. 
We reiterate our BUY rating and raise TP to HK$545 on Tencent. We expect game pipeline to fill the gap with the launch of two blockbusters in C3Q25.


[Tencent (700 HK, BUY, TP HK$545) Target Price Change]: C4Q24 Review: Good Time to Pick up Shares

Overseas Chinese Equities, Aequitas Research

Ming Lu

Overseas Chinese Equities

<ul>
<li>The growth rate of total revenue came back to two digits in 4Q24.</li>
<li>The growth rate of game revenue reached 20% YoY in 4Q24.</li>
<li>The gross margins of all business lines improved YoY in 4Q24.</li>
</ul>


The growth rate of total revenue came back to two digits in 4Q24.
The growth rate of game revenue reached 20% YoY in 4Q24.
The gross margins of all business lines improved YoY in 4Q24.


Tencent (700 HK): 4Q24, Revenue Growth Back to Two Digits

Equity Derivatives and Volatility Specialist, Clifton Derivatives

John Ley

Equity Derivatives and Volatility Specialist

Clifton Derivatives

Independent derivative and volatility research firm focusing on events/catalysts, earnings, relative value and cross asset volatility strategies.

<ul>
<li>We take a detailed look at the implied earnings move priced into Tencent options compared to historical outcomes.</li>
<li>Post-Earnings price movements are analyzed to assess directional tendencies and magnitude based on earnings beats and misses.</li>
<li>An interesting post-earnings pattern emerges, with an options strategy outlined.</li>
</ul>


We take a detailed look at the implied earnings move priced into Tencent options compared to historical outcomes.
Post-Earnings price movements are analyzed to assess directional tendencies and magnitude based on earnings beats and misses.
An interesting post-earnings pattern emerges, with an options strategy outlined.


Tencent Earnings: Implied Vs Realized Price Changes and a Post Earnings Pattern

China

Tencent Holdings Limited operates as an investment holding company. The Company, through its subsidiaries, provides Internet and mobile value-added services (VAS), online advertising, and e-commerce transactions. Tencent Holdings offers services to users worldwide.

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Tencent (700 HK)

Tencent (700 HK): Volatility Plays and Skew Top Trades

Strategies show dominance of long volatility approaches with a mix of bullish and bearish positions, taking advantage of longer expiration dates...

Gaudenz Schneider

Tencent/Netease: One Game Approved Each in March

We analyzed the game approval issued by NPPA for Chinese online game players for the month of March. Game approvals for large players are slow so...

Ke Yan, CFA, FRM

[Tencent (700 HK, BUY, TP HK$545) Target Price Change]: C4Q24 Review: Good Time to Pick up Shares

Tencent reports solid financials, but game pipeline concerns lead to shift in top pick to NetEase. Analysts maintain BUY rating and raise target...

Blue Lotus Research Institute

Tencent (700 HK): 4Q24, Revenue Growth Back to Two Digits

The growth rate of total revenue came back to two digits in 4Q24. The growth rate of game revenue reached 20% YoY in 4Q24. The gross margins of all...

Ming Lu

Tencent Earnings: Implied Vs Realized Price Changes and a Post Earnings Pattern

Analysis of Tencent options shows implied earnings move compared to historical outcomes, revealing post-earnings patterns and a potential options...

John Ley

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Tencent (700 HK): Volatility Plays and Skew Top Trades

Strategies show dominance of long volatility approaches with a mix of bullish and bearish positions, taking advantage of longer expiration dates...

Gaudenz Schneider

Tencent/Netease: One Game Approved Each in March

We analyzed the game approval issued by NPPA for Chinese online game players for the month of March. Game approvals for large players are slow so...

Ke Yan, CFA, FRM

[Tencent (700 HK, BUY, TP HK$545) Target Price Change]: C4Q24 Review: Good Time to Pick up Shares

​Tencent reports solid financials, but game pipeline concerns lead to shift in top pick to NetEase. Analysts maintain BUY rating and raise target...

Blue Lotus Research Institute

Tencent (700 HK): 4Q24, Revenue Growth Back to Two Digits

The growth rate of total revenue came back to two digits in 4Q24. The growth rate of game revenue reached 20% YoY in 4Q24. The gross margins of all...

Ming Lu

Tencent Earnings: Implied Vs Realized Price Changes and a Post Earnings Pattern

​Analysis of Tencent options shows implied earnings move compared to historical outcomes, revealing post-earnings patterns and a potential options...

John Ley

Tencent reports solid financials, but game pipeline concerns lead to shift in top pick to NetEase. Analysts maintain BUY rating and raise target...

Analysis of Tencent options shows implied earnings move compared to historical outcomes, revealing post-earnings patterns and a potential options...