Tencent Said to Study Deal for $15 Billion Game Developer Nexon
(Bloomberg) -- Tencent Holdings Ltd. is studying a potential deal for Nexon Co., as the Chinese internet giant looks for ways to bolster its lucrative gaming operations, people with knowledge of the matter said.
Shuttered NY College Has Alumni Fighting Over Its Future
Trump's Military Parade Has Washington Bracing for Tanks and Weaponry
NYC Renters Brace for Price Hikes After Broker-Fee Ban
NY Long Island Rail Service Resumes After Grand Central Fire
Do World's Fairs Still Matter?
Shenzhen-based Tencent has reached out to the family of Nexon's late founder Kim Jung-ju to discuss the possibility of an acquisition, the people said, asking not to be identified because the information is private. Kim's family has been speaking to advisers and evaluating options, according to the people.
Kim's relatives hold their stake through family investment firm NXC Corp., which — together with affiliated unit NXMH BV — owned 44.4% of Nexon as of June 30, according to Nexon's interim report. Kim's wife and daughters own about 67.6% of NXC.
It's unclear how receptive NXC is to a sale of the Nexon holding, and there's no certainty Tencent's deliberations will lead to a transaction, the people said. The structure of any deal hasn't been finalized, they added.
A representative for Tencent didn't respond to a request seeking comment, while Nexon and NXC declined to comment.
The move comes as Tencent, which already pursued an acquisition of Nexon in 2019, makes fresh forays into other South Korean assets. A subsidiary agreed to buy a nearly 10% stake in Seoul-based music producer SM Entertainment Co. in late May, just as an unofficial ban on K-pop in mainland China wanes.
Known for role-playing games like MapleStory, Nexon was founded in South Korea in 1994 and listed in Japan in 2011, in one of the biggest tech-related initial public offerings at the time. Nexon shares have climbed more than 10% in Tokyo trading this year, giving the company a market value of about $15 billion.
Changes in the shareholding structure after Kim's death in 2022 could complicate any deal. Family members handed the Korean government a stake in the NXC holding company in 2023 to settle an inheritance tax bill.
Kim's wife and two daughters inherited his stake in NXC after he died in Hawaii. The family also sold treasury shares in NXC back to the holding company for 650 billion won ($478 million) in August.
The Korean government has sought to sell its holding but failed to find a suitor, local media reported.
Shares of rival game developers like Ubisoft Entertainment SA, GungHo Online Entertainment Inc. and Sega Sammy Holdings Inc. have declined this year. While Nexon shares are up in 2025, they're nearly 30% off a peak in 2021.
NXC explored a sale of its Nexon stake six years ago, attracting interest from Tencent as well as buyout firms such as KKR & Co. and Hillhouse. The sale process was eventually shelved because of a failure to agree on price, Bloomberg News reported at the time.
Nexon and Tencent have already worked together, developing Dungeon & Fighter, a key revenue generator. In March, Tencent agreed to invest €1.16 billion ($1.3 billion) for a 25% stake in a new Ubisoft unit that holds the rights to intellectual properties including Assassin's Creed.
Nexon's first-quarter net sales totaled about ¥114 billion, while net income was ¥26 billion.
--With assistance from Sohee Kim and Zheping Huang.
New Grads Join Worst Entry-Level Job Market in Years
American Mid: Hampton Inn's Good-Enough Formula for World Domination
The Spying Scandal Rocking the World of HR Software
The SEC Pinned Its Hack on a Few Hapless Day Traders. The Full Story Is Far More Troubling
Cavs Owner Dan Gilbert Wants to Donate His Billions—and Walk Again
©2025 Bloomberg L.P.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
2 hours ago
- Yahoo
These 2 AI Stocks Give You Access to China's ‘New AI Tiger' MiniMax
Chinese AI startup MiniMax is emerging as a formidable competitor to DeepSeek, having recently launched breakthrough products, including the M1 reasoning model, which uses less than half the computing power of DeepSeek-R1. The Shanghai-based company, valued at $2.5 billion in its March 2024 funding round, is preparing for a Hong Kong initial public offering (IPO) as early as this year. MiniMax represents one of China's 'four new AI tigers' competing against Western giants, such as OpenAI. The company's latest innovations include the Hailuo 02 video generator and MiniMax Agent, which indicate it is poised to gain traction in the generative AI space. Dear Tesla Stock Fans, Mark Your Calendars for June 30 The 'Golden Era' for Tesla Starts June 22. Should You Buy TSLA Stock First? Nvidia Is Quickly Approaching a New Record High. Is It Too Late to Buy NVDA Stock? Markets move fast. Keep up by reading our FREE midday Barchart Brief newsletter for exclusive charts, analysis, and headlines. Investors can gain exposure to MiniMax through two major stakeholders: Alibaba (BABA) and Tencent (TCEHY), both of which are strategic investors in the startup. This provides retail investors with indirect access to one of China's most promising AI companies, without requiring them to wait for the IPO. However, industry experts warn that these so-called AI tigers face sustainability challenges, with most still burning cash while seeking viable profit models beyond free trials and limited enterprise customization. Valued at a market capitalization of $593 billion, Tencent is one of the largest companies in China. In Q1, it reported revenue of $25.1 billion, a 13% year-over-year increase, while net income grew 22% to $8.5 billion. The technology giant's gross profit exceeded $14 billion for the first time, demonstrating strong operational leverage across its diversified business portfolio. Tencent's strategic AI investments are already generating tangible returns across multiple segments. Marketing services revenue accelerated 20% year-over-year, benefiting from AI-powered advertising improvements that enhanced click-through rates from historical 1% levels to 3% in certain inventories. Domestic Games achieved exceptional 24% growth, with flagship titles like Honor of Kings and Peacekeeper Elite reaching record quarterly revenues, supported by AI-enhanced user engagement and content optimization. Tencent's Weixin ecosystem, serving 1.4 billion monthly active users, is becoming the centerpiece of its AI strategy. The tech giant has integrated the Yuanbao AI assistant directly into Weixin chats, enabling context-aware responses and content discovery. Weixin Search now incorporates large language model results, while AI-powered tools help content creators generate images and video effects, significantly reducing the time required for Mini Program development. The gaming portfolio demonstrated remarkable strength, with Delta Force achieving 12 million peak daily active users and becoming the highest-ranked new mobile game released in China over the past three years. International games grew 23% year-over-year, driven by titles including PUBG Mobile and Brawl Stars. Management emphasized that current AI investments represent a long-term value creation strategy, with CEO Pony Ma noting that while near-term costs may temporarily narrow operating leverage, these investments will generate 'substantial incremental returns' over the longer term. Tencent increased capital expenditures by 91% year-over-year to $3.8 billion, primarily for investments in GPUs and servers to enhance its AI capabilities. Out of the 16 analysts covering Tencent stock, 13 recommend 'Strong Buy,' two recommend 'Moderate Buy,' and one recommends 'Hold.' The average target price for Tencent stock is $90, roughly 41% above the current price of $64. In fiscal Q4 2025 (ended in March), Alibaba grew its sales by 7% year over year to $32.6 billion. A focus on operational efficiency allowed the e-commerce giant to increase adjusted EBITDA by 36% to $4.6 billion. Alibaba's AI and cloud computing initiatives are driving momentum. Alibaba Cloud achieved accelerated 18% revenue growth, powered by sustained triple-digit growth in AI-related products for the seventh consecutive quarter. Management highlighted the expansion of AI adoption beyond large enterprises to small and medium-sized businesses, with new customers migrating from traditional offline infrastructure to cloud-based AI services across various sectors, including manufacturing, financial services, and even animal farming. E-commerce operations showed strong user engagement, with Taobao and Tmall Group's customer management revenue growing 12% year-over-year, driven by improved monetization through the Quanzhantui advertising platform and new software service fees. The platform's premium 88VIP membership exceeded 50 million users, demonstrating growing customer loyalty and spending power. International expansion accelerated through Alibaba International Digital Commerce (AIDC), which achieved 22% revenue growth driven by robust cross-border business performance. It remains on track to achieve quarterly profitability in its international e-commerce operations. Alibaba strengthened its balance sheet by divesting non-core assets, generating $2.6 billion in cash proceeds. The company returned $16.5 billion to shareholders through $11.9 billion in share repurchases and $4.6 billion in dividends, including a 5% increase in annual dividends. With a strong $50.5 billion net cash position, Alibaba is well-positioned to capitalize on AI opportunities while maintaining its commitment to shareholder returns. Out of the 20 analysts covering BABA stock, 19 recommend 'Strong Buy' and one recommends 'Moderate Buy.' The average target price for BABA stock is $162, 44% above the current price. On the date of publication, Aditya Raghunath did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on
Yahoo
2 hours ago
- Yahoo
A Look At The Intrinsic Value Of Kim Heng Limited (Catalist:5G2)
The projected fair value for Kim Heng is S$0.11 based on 2 Stage Free Cash Flow to Equity With S$0.089 share price, Kim Heng appears to be trading close to its estimated fair value Peers of Kim Heng are currently trading on average at a 97% premium How far off is Kim Heng Limited (Catalist:5G2) from its intrinsic value? Using the most recent financial data, we'll take a look at whether the stock is fairly priced by taking the expected future cash flows and discounting them to their present value. Our analysis will employ the Discounted Cash Flow (DCF) model. There's really not all that much to it, even though it might appear quite complex. Companies can be valued in a lot of ways, so we would point out that a DCF is not perfect for every situation. Anyone interested in learning a bit more about intrinsic value should have a read of the Simply Wall St analysis model. Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. We use what is known as a 2-stage model, which simply means we have two different periods of growth rates for the company's cash flows. Generally the first stage is higher growth, and the second stage is a lower growth phase. In the first stage we need to estimate the cash flows to the business over the next ten years. Seeing as no analyst estimates of free cash flow are available to us, we have extrapolate the previous free cash flow (FCF) from the company's last reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years. A DCF is all about the idea that a dollar in the future is less valuable than a dollar today, and so the sum of these future cash flows is then discounted to today's value: 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Levered FCF (SGD, Millions) S$6.33m S$5.88m S$5.63m S$5.50m S$5.46m S$5.46m S$5.50m S$5.57m S$5.66m S$5.76m Growth Rate Estimate Source Est @ -11.11% Est @ -7.07% Est @ -4.24% Est @ -2.26% Est @ -0.87% Est @ 0.10% Est @ 0.78% Est @ 1.25% Est @ 1.58% Est @ 1.82% Present Value (SGD, Millions) Discounted @ 8.8% S$5.8 S$5.0 S$4.4 S$3.9 S$3.6 S$3.3 S$3.0 S$2.8 S$2.6 S$2.5 ("Est" = FCF growth rate estimated by Simply Wall St)Present Value of 10-year Cash Flow (PVCF) = S$37m After calculating the present value of future cash flows in the initial 10-year period, we need to calculate the Terminal Value, which accounts for all future cash flows beyond the first stage. For a number of reasons a very conservative growth rate is used that cannot exceed that of a country's GDP growth. In this case we have used the 5-year average of the 10-year government bond yield (2.4%) to estimate future growth. In the same way as with the 10-year 'growth' period, we discount future cash flows to today's value, using a cost of equity of 8.8%. Terminal Value (TV)= FCF2034 × (1 + g) ÷ (r – g) = S$5.8m× (1 + 2.4%) ÷ (8.8%– 2.4%) = S$91m Present Value of Terminal Value (PVTV)= TV / (1 + r)10= S$91m÷ ( 1 + 8.8%)10= S$39m The total value, or equity value, is then the sum of the present value of the future cash flows, which in this case is S$76m. In the final step we divide the equity value by the number of shares outstanding. Relative to the current share price of S$0.09, the company appears about fair value at a 17% discount to where the stock price trades currently. Valuations are imprecise instruments though, rather like a telescope - move a few degrees and end up in a different galaxy. Do keep this in mind. We would point out that the most important inputs to a discounted cash flow are the discount rate and of course the actual cash flows. You don't have to agree with these inputs, I recommend redoing the calculations yourself and playing with them. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Kim Heng as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 8.8%, which is based on a levered beta of 1.498. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business. Check out our latest analysis for Kim Heng Strength Debt is well covered by cash flow. Weakness Earnings declined over the past year. Interest payments on debt are not well covered. Opportunity Current share price is below our estimate of fair value. Lack of analyst coverage makes it difficult to determine 5G2's earnings prospects. Threat No apparent threats visible for 5G2. Although the valuation of a company is important, it ideally won't be the sole piece of analysis you scrutinize for a company. The DCF model is not a perfect stock valuation tool. Instead the best use for a DCF model is to test certain assumptions and theories to see if they would lead to the company being undervalued or overvalued. For example, changes in the company's cost of equity or the risk free rate can significantly impact the valuation. For Kim Heng, we've compiled three important aspects you should assess: Risks: Every company has them, and we've spotted 5 warning signs for Kim Heng (of which 1 can't be ignored!) you should know about. Other Solid Businesses: Low debt, high returns on equity and good past performance are fundamental to a strong business. Why not explore our interactive list of stocks with solid business fundamentals to see if there are other companies you may not have considered! Other Environmentally-Friendly Companies: Concerned about the environment and think consumers will buy eco-friendly products more and more? Browse through our interactive list of companies that are thinking about a greener future to discover some stocks you may not have thought of! PS. Simply Wall St updates its DCF calculation for every Singaporean stock every day, so if you want to find the intrinsic value of any other stock just search here. — Investing narratives with Fair Values Vita Life Sciences Set for a 12.72% Revenue Growth While Tackling Operational Challenges By Robbo – Community Contributor Fair Value Estimated: A$2.42 · 0.1% Overvalued Vossloh rides a €500 billion wave to boost growth and earnings in the next decade By Chris1 – Community Contributor Fair Value Estimated: €78.41 · 0.1% Overvalued Intuitive Surgical Will Transform Healthcare with 12% Revenue Growth By Unike – Community Contributor Fair Value Estimated: $325.55 · 0.6% Undervalued View more featured narratives — Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
2 hours ago
- Yahoo
Trump's Airstrikes on Iran Leave Oil Market Poised for Surge
(Bloomberg) -- The oil market has been wrestling for days with Donald Trump's next act in an escalating Middle East conflict. Now American jets have struck Iran's three main nuclear sites, a move that leaves traders preparing for a price surge — but still guessing where the crisis goes from here. Bezos Wedding Draws Protests, Soul-Searching Over Tourism in Venice One Architect's Quest to Save Mumbai's Heritage From Disappearing JFK AirTrain Cuts Fares 50% This Summer to Lure Riders Off Roads NYC Congestion Toll Cuts Manhattan Gridlock by 25%, RPA Reports Taser-Maker Axon Triggers a NIMBY Backlash in its Hometown In a wild week, Brent futures have jumped 11% since Israel attacked its nemesis, but with sharp moves up and down from one day to the next. That rise is expected to restart on Monday, after the US assault — which targeted sites at Fordow, Natanz, and Esfahan — dramatically raised the stakes in a region that accounts for a third of global oil output. From frenzied options markets, to soaring freight and diesel pricing, to a radical redrawing of crude's pivotal forward curve, all of that volatility is expected to intensify in the week ahead. 'Much depends on how Iran responds in the coming hours and days — but this could set us on a path toward $100 oil, if Iran responds as they have previously threatened to,' said Saul Kavonic, an energy analyst at MST Marquee. 'This US attack could see a conflagration of the conflict to include Iran responding by targeting regional American interests that include Gulf oil infrastructure in places such as Iraq, or harassing passage through the Strait of Hormuz.' The maritime chokepoint at the mouth of the Persian Gulf is a vital conduit for not just Iranian shipments, but also for those from Saudi Arabia, Iraq, Kuwait and other members of the Organization of the Petroleum Exporting Countries. Central to everything is the Trump administration's ultimate intention in Iran, having joined Israel's attack. At one stage last week, it appeared more a question of when than if. That then changed late Thursday, when the US president said he'd mull his decision for two weeks. Then in the early hours of Sunday, Iranian time, he announced that Fordow, Natanz, and Isfahan were struck, and described a 'payload of BOMBS' dropped on Fordow, a key location of uranium enrichment. 'The market wants certainty, and this now firmly pushes the US into the Middle East theater,' said Joe DeLaura, a former trader and global energy strategist at Rabobank, adding prices were now expected to rise when oil reopens. 'But I think that this means the US Navy will be tasked to keep the Strait open,' he said, adding prices could head into the $80-to-$90 a barrel range. Still, so far there has been little sign of disruption to oil flows from the region. 'Should the US provide direct military support to Israel and play its part in removing the current regime the initial market reaction will be a price spike,' said Tamas Varga, an analyst at brokerage PVM Oil Associates Ltd, said at the end of last week. But his firm's expectation is that oil will not become part of the conflict because it's not in the interests of either side. The fate of oil matters because it drives fuel prices and inflation — something Trump said he would quell when he was campaigning for office. In times of extreme volatility, shortages of oil have even precipitated recessions. So far, there's been no meaningful curtailment through the Strait of Hormuz, through which about a fifth of the world's produced and consumed oil flows every day. Indeed, Iran even appears to be racing to lift its exports as part of its logistical response to the conflict. Avoiding a wider conflagration and preventing disruptions to supply would push oil prices lower, while also bringing down everything that spiked in tandem with them. Against that, America joining could be all-defining, calling into question security through the waterway and from the region at large. On Friday, Iran said it might consider adjustments to its enrichment program, driving down futures and reminding the world that Tehran's actions are important to petroleum markets too. Among assets roiled by the tension are options contracts, where traders paid enormous premiums to hedge against further price spikes. At times since the conflict began, they paid the most to protect against a rally since at least 2013. Record volumes of bullish call options have changed hands since the attacks started. Exiting Trades The market, though, was on edge even before Trump's announcement. Traders have been exiting futures positions at one of the fastest rates on record — an indication of both the stress that higher levels of volatility is placing on derivatives books, and the unpredictable path ahead. In total, the number of futures contracts held on the main exchanges plunged by the equivalent of 367 million barrels, or about 7%, since the close on June. 12, the eve of Israel's attack. Traders and brokers say the higher levels of volatility have made pricing deals harder over the past week. 'Traders and analysts should be viewing the current oil price gyrations in the context of speculative de-risking,' said Ryan Fitzmaurice, senior commodities strategist at Marex Group Plc. 'Going forward, market volatility and open interest will be key areas to watch.' The cost of hiring a ship to carry crude from the Middle East to China has jumped close to 90% since before Israeli attacks began. Earnings for vessels carrying fuels like gasoline and jet fuel have also leaped, as have insurance premiums. The danger to vessels in the region's waters was underscored when two oil tankers crashed into each other causing a fiery explosion — though on this occasion, the ship's owner asserted there was no link to the conflict. Still, almost 1,000 ships a day are having their GPS signals jammed, creating growing safety risks. The MICA Center, a French liaison between the military and commercial shipping, said the tanker crash was likely 'aggravated' by jamming. 'Next days will be critical in determining whether a diplomatic solution with Iran is possible and if the US might resort to military action,' it said in an update. 'Maritime trade is not being targeted. The situation might change abruptly.' The risk to flows from the region, coupled with the sharp increase in shipping costs, is bolstering demand for crudes from outside of the Persian Gulf. Pullback Risk The higher different prices race, the greater the risk of a pullback if the prospect of de-escalation takes shape. And even if tensions do remain high, there's precedent from a few years ago for a meaningful supply disruption to quickly get resolved. When an attack in 2019 on processing facilities at Abqaiq in Saudi Arabia knocked out 7% of global supply, it took just a few weeks for crude futures to trade lower than before the attacks occurred, as supplies were quickly restored and backfilled. That's one reason, coupled with a persistent threat of geopolitical risks that often don't morph into real supply curbs, why traders say prices haven't spiked more in recent days. 'This is the big one,' said John Kilduff, a partner at Again Capital, pointing to a $8-a-barrel risk premium as plausible. 'The market default on this development is higher. How high depends on Iran's response — or the realistic prospects of a meaningful response, which may not be there.' --With assistance from Stephen Stapczynski, Julia Fanzeres and Mia Gindis. (Writes through after Trump announces attack.) Luxury Counterfeiters Keep Outsmarting the Makers of $10,000 Handbags Is Mark Cuban the Loudmouth Billionaire that Democrats Need for 2028? Ken Griffin on Trump, Harvard and Why Novice Investors Won't Beat the Pros The US Has More Copper Than China But No Way to Refine All of It Can 'MAMUWT' Be to Musk What 'TACO' Is to Trump? ©2025 Bloomberg L.P. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
