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QuestionsCategory: Valuation QuadrantCurrency fluctuation impact to Tencent
Jeff asked 3 years ago

Hello Victor, Rusmin,
As RMB has been weakening against HKD close to 10% from year peak, may I seek your view if is there any impact to TENCENT in terms of business fundamental and valuation, due to revenue/earnings are recorded in RMB but stock priced in HKD?

1 Answers
Rusmin Ang answered 3 years ago

Hi Jeff,
 
I think there won’t be any impact on the financials as majority of revenue is recorded in RMB. But for valuation, there will be impact as the earnings/cashflow has to be converted to HKD in estimating the value. So you will need to adjust downward for your forex rate. 

Jeff replied 3 years ago

Thanks Rusmin.