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Have Tencent Shares Bottomed Out After Losing $150B This Year?

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Tencent [TCEHY] investors have had a rough year so far as shares of China’s internet giant have declined close to 30% this year. The stock has declined due to the trade wars between China and the United States, declining margins and gaming regulations.

China is the biggest gaming market in the world and Tencent is the largest gaming company. So are these fears overblown? Have Tencent shares bottomed out? Is there significant upside potential for Tencent investors?

Gaming regulations

Chinese government departments approve video game licenses. However, certain departments are in a restructuring phase according to this Bloomberg report. This has led to a temporary freeze in gaming approvals.

The report states that while the National Radio and TV Administration has not issued licenses for 4 months now, the Ministry of Culture and Tourism has made registering games difficult.

Government interference and regulations are a part and parcel of the Chinese markets. There is always a potential risk of uncertainty for investors here. Tencent is yet to receive the necessary approvals for the new genre of gaming that has taken the world by storm – the battle royale.

Games such as Fortnite and PUBG have gained immense popularity and impacted stocks of top gaming companies such as Activision Blizzard [ATVI] and Electronic Arts [EA]. Further, Tencent was asked to recall one of its highly anticipated games – Monster Hunter: World just a few days after it debuted.

The game was pulled out after people raised objections to its content. Tencent is not concerned over this delay and expects the regulatory issues to be resolved quickly.

Trade war fears

The ongoing trade wars between China and the United States have driven several Chinese and domestic stocks lower. The two governments have been battling out since the start of 2018 and this is unlikely to abate in the near future.

However, such a reaction to the trade wars does not make sense, especially for Tencent as it generates almost 96% of revenue from domestic markets.

Declining margins

In Q2 2018, Tencent’s operating profits rose 11% year-over-year driven by a 30% rise in sales. However, the company’s operating margin fell to 30% from 35%. Profit margins were impacted due to the ongoing gaming ban. Tencent is unable to monetize two of its key video games.

The Chinese government is also increasing regulations on digital payment products.

Is Tencent’s growth story over?

The answer is NO. Despite these headwinds analysts expect Tencent’s sales to rise 29% to a whopping $78B in 2020. Tencent also owns China’s most popular messaging app known as WeChat. This is similar to WhatsApp and has over a billion users.

Its growing ecosystem of Mini Programs (these are apps that are a part of the core application) makes the WeChat platform more powerful. Mini-programs include a scan-to-buy function used by retailers, a pre-ordering restaurant app and a transport payment solution.

WeChat also has a digital payment system known as WeChat Pay and can be accessed by third-party apps as well as physical retail stores.

Once the regulatory issues are sorted, Tencent shares will continue to move higher driven by a growing gaming market. Don’t forget Tencent has generated absolute returns of a monstrous 34000% since 2004.

Money

Airbnb Experiences: 5 Easy Ways To Make Extra Cash Today

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Airbnb Experiences: 5 Easy Ways To Make Extra Cash Today

Airbnb is a great way to earn money by renting out your home or apartment.

However, did you know that you can also make money by offering experiences on Airbnb? Here are five easy ways to make extra cash today by creating and offering Airbnb experiences.

1. Offer a food tour

If you love food, why not share your passion with others? Create a food tour experience in your city, showcasing the best local cuisine. You can offer a walking tour or a bike tour, and include stops at local markets, restaurants, and cafes. This is a great way to meet new people and earn money at the same time.

2. Teach a skill or hobby

Do you have a skill or hobby that you’re passionate about? Share your knowledge with others by offering an experience on Airbnb. You can teach anything from photography to cooking to yoga. People are always looking for new experiences, and they’re willing to pay for them.

3. Host a cultural event

If you come from a different culture, why not share it with others? Host a cultural event, such as a traditional dance, music, or art class. This is a great way to showcase your culture and make some extra cash.

4. Offer a nature experience

If you live in a beautiful area, offer a nature experience on Airbnb. You can offer a hiking tour, a kayaking trip, or a birdwatching tour. People love to get out into nature, and they’re willing to pay for it.

5. Host a wellness retreat

If you’re passionate about wellness, why not host a retreat? You can offer yoga classes, meditation sessions, and healthy meals. This is a great way to help people relax and recharge, while earning some extra cash.

In conclusion, offering experiences on Airbnb is a great way to make some extra cash. With these five easy ideas, you can get started today.

For more ideas and tips on how to make money, check out this Airbnb guide inside our academy.

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Money

10 Tips for Making More Money with Your Airbnb Listing

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If you’re an Airbnb host looking to increase your revenue, there are several strategies you can implement to make your listing more appealing to potential guests.

Here are 10 tips for making more money with your Airbnb listing:

  1. Set competitive pricing: Research the prices of similar listings in your area to ensure you’re offering a competitive rate. Consider lowering your prices during slow seasons or offering discounts for longer stays.
  2. Offer extra amenities: Providing extra amenities, such as a pool, hot tub, or complimentary breakfast, can make your listing more attractive to guests and justify a higher price.
  3. Invest in high-quality photos: High-quality photos of your space can make a big difference in how many bookings you receive. Consider hiring a professional photographer to capture the best aspects of your listing.
  4. Keep your listing up to date: Make sure your listing accurately reflects the current state of your property. Update your photos, descriptions, and amenities regularly to keep your listing relevant and appealing.
  5. Respond promptly to inquiries: Quick responses to guest inquiries can lead to more bookings and positive reviews. Make sure to check your messages frequently and respond as soon as possible.
  6. Provide excellent customer service: Going above and beyond for your guests can lead to positive reviews and repeat bookings. Make sure to communicate clearly and address any issues promptly.
  7. Offer local recommendations: Providing guests with recommendations for local restaurants, attractions, and activities can enhance their experience and justify a higher price for your listing.
  8. Allow instant bookings: Allowing guests to book instantly can make your listing more appealing to those who need to book at the last minute. However, make sure to set clear guidelines for instant bookings to avoid any issues.
  9. Offer discounts for repeat guests: Offering discounts to guests who have stayed with you in the past can encourage repeat bookings and increase your revenue over time.
  10. Keep your space clean and well-maintained: A clean and well-maintained space can lead to positive reviews and repeat bookings. Make sure to keep your space clean and address any maintenance issues promptly.

Implementing these 10 tips can help you make more money with your Airbnb listing and improve your overall hosting experience. Happy hosting!

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How Big Real Estate Moguls Avoid Taxes (And How You Can, Too) 👀

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I was looking around Google for an old article on tax strategies and this five-year old video of myself happened to pop up.

I’m interviewing a tax expert about how real estate investors avoid paying taxes in perpetuity—AND how everyday citizens can do the same thing.

(Real estate—our TEMPLE I and TEMPLE II projects included—has a number of tax benefits savvy investors have capitalized on for years, including Opportunity Zone breaks and 10-year tax abatements.)

There’s the 1031 exchange, of course, which I’ve shared with you guys before. 

Just to refresh your memory, the 1031 Exchange allows you to roll over gains from your last project into a new property TAX FREE—as long as said property is worth the same or more.

But there’s ANOTHER TAX LOOPHOLE that can take your portfolio to an entirely new level by splitting your capital gains into MULTIPLE properties.

So I thought I’d share it with you guys. 💎

You can check it out here.

Let me know what you think. 😎

PS: In our next update, I’m going to break down how real estate moguls get paid from their properties…tax free. 👀
PPS: If you want to learn how to implement generational wealth strategies like this one, you can join our NYCE wealth academy (TRIBE U) here.

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