Equity Valuation & Analysis Report - Tencent Holdings Limited

8305 Words Jan 19th, 2014 34 Pages
Equity Valuation & Analysis Report

ACCT6111E Business Valuation & Analysis
Instructor: Professor Albert Tsang

Team members
Name Student ID
Winnie Yam 1155025593
Sherry Zhang 1155023131
Fiona Tong 1093644801
Tommy Wu 1155021510
Robert Pun 1155026071

21 November 2013

TABLE OF CONTENTS

1.0 Executive summary [3]

2.0 Industry overview [4]

3.0 Company overview [6]

4.0 Financial statement analysis [12]

5.0 Profitability analysis [23]

6.0 Company valuation [27]

7.0 Concerns beyond financials [32]

8.0 Recommendations [35]

Bibliography [36]

List of Exhibits [37]
List of Appendix [48]
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Participants may also take the advantage of weak enforcement of intellectual property protection, e-commerce and anti-trust laws and regulations to expand their businesses apart from their successful business strategies, which resulted in the emergency of giants like Baidu (online search engine), Tencent (instant messenger) and Alibaba (e-commerce platform). As a result, the threat of new entrant is moderate at the moment because of the user lock-in effect and dominant market position enjoyed by existing giants, which constitutes high entry barrier for potential entrants.

The threat of substitutes in the industry is rather low at the moment due to the user lock-in effect and dominant market position enjoyed by existing giants, resulting in a higher switching cost and hence a relatively lower bargaining power of buyers.

The bargaining power of suppliers, on the other hand, could be considered moderate for the time being due to their good reliance on vendors to provide develop and maintain high-quality online business interfaces.

From the above discussion, the competition within the industry is rather moderate at the moment and the industry/ market is still growing that
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