Critical Survey: Tencent (OTCMKTS:TCEHY) versus 36Kr (NASDAQ:KRKR)

36Kr (NASDAQ:KRKR) and Tencent (OTCMKTS:TCEHY) are both communication services companies, but which is the better stock? We will contrast the two companies based on the strength of their analyst recommendations, profitability, institutional ownership, risk, dividends, valuation and earnings.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for 36Kr and Tencent, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
36Kr	1	0	0	0	1.00
Tencent	1	1	2	0	2.25

Tencent has a consensus price target of $106.00, suggesting a potential upside of 87.28%. Given Tencent’s stronger consensus rating and higher probable upside, analysts plainly believe Tencent is more favorable than 36Kr.

Institutional & Insider Ownership

0.1% of 36Kr shares are owned by institutional investors. Comparatively, 0.0% of Tencent shares are owned by institutional investors. 39.4% of 36Kr shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares 36Kr and Tencent”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
36Kr	$32.59 million	0.18	$1.55 million	($3.40)	-0.90
Tencent	$104.58 billion	4.93	$31.28 billion	$3.65	15.51

Tencent has higher revenue and earnings than 36Kr. 36Kr is trading at a lower price-to-earnings ratio than Tencent, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares 36Kr and Tencent’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
36Kr	N/A	N/A	N/A
Tencent	29.83%	19.98%	12.03%

Volatility & Risk

36Kr has a beta of 0.53, suggesting that its share price is 47% less volatile than the S&P 500. Comparatively, Tencent has a beta of 0.26, suggesting that its share price is 74% less volatile than the S&P 500.

Summary

Tencent beats 36Kr on 11 of the 14 factors compared between the two stocks.

About 36Kr

36Kr Holdings Inc. provides content and business services in the People's Republic of China. It creates and distributes various content, including insightful reports on companies and industries, timely market updates, thought-provoking editorials, and commentaries, as well as original video and audio content in various industries, such as technology, consumer, retail, healthcare, media and entertainment, and enterprise services. The company's business services include online advertising services; enterprise value-added services, such as integrated marketing, advertisement agent, online/offline event, and consulting services; and subscription services to individuals, institutional investors, and enterprises. 36Kr Holdings Inc. was founded in 2010 and is headquartered in Beijing, the People's Republic of China.

About Tencent

Tencent Holdings Limited, an investment holding company, offers value-added services (VAS), online advertising, fintech, and business services in the People's Republic of China and internationally. It operates through VAS, Online Advertising, FinTech and Business Services, and Others segments. The company's consumers business provides communication and services, such as instant messaging and social network; digital content including online games, videos, live streaming, news, music, and literature; fintech services, which includes mobile payment, wealth management, loans, and securities trading; and various tools, such as network security management, browser, navigation, application management, email, etc. Its enterprise business comprises marketing solutions, which offers digital tools including user insight, creative management, placement strategy, and digital assets management; and cloud services, such as cloud computing, big data analytics, artificial intelligence, Internet of Things, security and other technologies for financial services, education, healthcare, retail, industry, transport, energy, and radio & television application. In addition, the company operates innovation business, which includes artificial intelligences; and discover and develops enterprise and next-generation technologies for food production, energy, and water management application. Tencent Holdings Limited was formerly known as Tencent (BVI) Limited and changed its name to Tencent Holding Limited in February 2004. The company was founded in 1998 and is headquartered in Shenzhen, the People's Republic of China.