Currency fluctuation impact to Tencent | The Investment Quadrant by The Fifth Person

Questions › Category: Valuation Quadrant › Currency 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

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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.