Valuation of the Tencent Company under the Risk Conditions

Tianzhen Jiang

Master's thesis

Abstract:

The main purpose of this thesis is using the valuation analysis to analysis the value of the Tencent company in financial markets. In this thesis ,it uses the historical data from 2009 to 2013 and predicts the development of the Tencent company instant messenger industry in 2014-2016. In chapter 2, theoretical part, the methodology of the valuation process will be introduced. The main content includes general description of company valuation, financial plan, discounted cash flow method, cost of capital and sales revenues prediction. In chapter 3, the Industry analysis part, it is based on the observation that profit margins vary between industries, which can be explained by the structure of an industry and it introduces the main products of the Tencent company in social networking services industry which is Tencent QQ. In this part, another important introduction is the SWOT analysis and business strategies analysis of the Tencent QQ. Usually in the SWOT and business strategies analysis, through SWOT analysis the strategies analysis, compared with other competitors, we can know the strength, weakness, opportunities and threats of the Tencent company in social networking services industry. The purpose of Industry analysis is to determine the attractiveness of an industry. In chapter 4, there is an estimation part of the expected market value of Tencent company in social networking services industry. There is a calculation with the methods which are mentioned in the chapter 2. After the estimation of the expected market value, the results of the expected market value and the book value should be compared. Then, we can make sensitivity analysis of the indicators which can influence the valuation. The chapter 5 is a conclusion and a overall of the thesis . In this part, the results to the Tencent company data analysis in social networking services industry from the chapter 1 to chapter will be told about possibly. Last but not least, the future prediction and the purpose of the development of the company in the instant messenger industry can be made on comments.

Abstract:

The main purpose of this thesis is using the valuation analysis to analysis the value of the Tencent company in financial markets. In this thesis ,it uses the historical data from 2009 to 2013 and predicts the development of the Tencent company instant messenger industry in 2014-2016. In chapter 2, theoretical part, the methodology of the valuation process will be introduced. The main content includes general description of company valuation, financial plan, discounted cash flow method, cost of capital and sales revenues prediction. In chapter 3, the Industry analysis part, it is based on the observation that profit margins vary between industries, which can be explained by the structure of an industry and it introduces the main products of the Tencent company in social networking services industry which is Tencent QQ. In this part, another important introduction is the SWOT analysis and business strategies analysis of the Tencent QQ. Usually in the SWOT and business strategies analysis, through SWOT analysis the strategies analysis, compared with other competitors, we can know the strength, weakness, opportunities and threats of the Tencent company in social networking services industry. The purpose of Industry analysis is to determine the attractiveness of an industry. In chapter 4, there is an estimation part of the expected market value of Tencent company in social networking services industry. There is a calculation with the methods which are mentioned in the chapter 2. After the estimation of the expected market value, the results of the expected market value and the book value should be compared. Then, we can make sensitivity analysis of the indicators which can influence the valuation. The chapter 5 is a conclusion and a overall of the thesis . In this part, the results to the Tencent company data analysis in social networking services industry from the chapter 1 to chapter will be told about possibly. Last but not least, the future prediction and the purpose of the development of the company in the instant messenger industry can be made on comments.

Keywords

Valuations, Tencent company, financial analysis, social net working

Keywords

Valuations, Tencent company, financial analysis, social net working

Language used: English

Date on which the thesis was submitted / produced: 25. 4. 2015

Thesis defence

• Date of defence: 1. 9. 2015
• Supervisor: Petr Gurný
• Reader: Miroslav Čulík

VŠB - Technical University of Ostrava

Ekonomická fakulta

Master programme / field:
Hospodářská politika a správa / Finance