Asia Tea Time - #81 ☕

This week I talk Tencent’s latest (encouraging) results and one big new – and positive – change to UOB’s UOB$ programme for credit card air miles chasers. 

Macro in Asia

Tencent’s earnings help ease worries of China tech investors

Tencent, the world’s biggest gaming company, saw its revenue rise 8% year-on-year in the third quarter of 2024 as its gaming business saw some success with new launches.

The Chinese company’s profit also soared 47% year-on-year during the period.

Why it’s happening

• Gaming is getting a boost worldwide with some mega hits coming out for Tencent so far this year, including its release of Dungeon & Fighter Mobile (DnF) – which it launched in May. Clearly the game was vibin’ with its audience, as it broke the US$100 million revenue mark in just 10 days.

• Tencent also backed the mega-successful launch of Black Myth: Wukong, which smashed a lot of records.

• Artificial Intelligence (AI) for Tencent was a driver of growth too but in the online ads space, where the company is deploying it to help create targeted ads. 

Why it matters

• Tencent is always taken as a big barometer of how the Chinese tech sector is doing. Its results appeased some investors who were freaking out about the strength of China’s technology companies amid weak consumer spending in China.

• The company is also – inevitably – compared to other tech giants in China like Alibaba and JD.com (two e-commerce giants), with the former reporting its earnings in the same week but on Friday 15 November. Spoiler alert: they weren’t as good as Tencent’s.

What’s next?

• Investors want to see how China’s economy holds up as the property debt crisis still continues to weigh on growth and companies’ outlooks.

Tim’s Take 

Tencent seems to be investors’ “safe bet” if they want to invest in large cap stocks in the world’s second-largest economy. 

Of course, shareholders are going to want to see more returns from the company. Management did say that it would generate “significant” free cash flow next year that would potentially be used for dividends and buybacks (yay!) yet the lingering worries over the hostile regulatory environment for tech companies in China won’t be going anyway any time soon. 

Tim’s Money Tip of the Week

Banks don’t usually give us customers good news when it comes to products they’re selling. Generally, they have control over those pesky T&Cs (i.e. the fine print) and they’re not exactly going to be rewarding you on the reg.

However, “never say never” and it turns out UOB has actually provided us with some good news regarding their rewards programme related to their credit card spend. 

Previously, users of UOB’s many air miles cards – including the UOB Preferred Platinum Visa, the UOB Visa Signature, and the UOB Lady’s Cards – could not earn specific amounts of UNI$ (the currency that can be turned into KrisFlyer miles) because of a weird, obscure alternative rewards programme called UOB$.

That programme meant that spend at specific merchants, like Starbucks, Crystal Jade, Cold Storage, Giant, Guardian, Toast Box, and BreadTalk to name just a few, would earn NO UNI$ and instead could only earn pretty useless UOB$ cashback.

Anyway, that has been put to an end by UOB and now cardholders – particularly those holding the UOB Preferred Platinum Visa – need not worry about not earning UNI$ at these merchants. 

UOB has said that from 1 November all transactions at these merchants will earn UNI$ at the normal rate. Spending at UOB$ programme merchants means you can actually earn extra cashback in addition to your UNI$.

So now, from being merchants we should actively avoid, the UOB$ programme is one that actually offers us bonuses on top. The big takeaway? Those holding the UOB Preferred Plationum Visa need no longer worry about spending at any of these UOB$ merchants.