Normally I tend to place my monthly stock purchase at the end of the month just after I received my salary. This month I’m early. I planned to buy this month Tencent (NNND)stocks and I placed a limit order almost 5% below the current price. Last days the price of Tencent dropped and I got 30 shares at a price of €34,86 at the Frankfurt exchange.
Tencent is not really a dividend stock, so not a regular stock pick for me. This buy is more a purchase against the current sentiment in the market which is negative for Tencent. Tencent is down 30% from it’s highest price this year. I have Tencent a long time on my watchlist, because it’s a company with a strong position in China. Tencent has a strong moat in China with the WeChat app. The Chinese market is still difficult to enter by foreign companies so it’s my opinion that Tencent won’t experience any competition from Facebook or Alphabet on their homemarket.
The advantage is possibly also a weakness. The Chinese government is softly said not a big fan of the gaming market and lately Beijing is restricting gaming approvals. Near-term there are regulatory challenges in China, but for longer term overall industry growth prospects within Asia are very solid.
With the purchase of Tencent stocks I gain more exposure to Technology and China exposure.
Tencent payed a dividend of HK$0.88 per share over 2017. This is approximately €0.10 per share. As a result of purchasing 30 Tencent shares my yearly expected dividend income will increase with €3,00. The yield on cost based on the current dividend is 0,29%.