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Tencent Holdings Ltd 00700

Morningstar Rating
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Stock XHKG Rating as of
HKD 339.40 −4.80 (1.39%)
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As of Delayed Price Closed
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Company Report

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Tencent Earnings: Scoring Big on Shareholder Returns; Gaming Turnaround Takes Center Stage

Ivan Su

Tencent's fourth-quarter earnings highlighted significant capital returns to shareholders, with the firm promising to distribute about 4.8% of its market cap as of March 20 as buybacks and dividends, affirming our Exemplary Capital Allocation Rating. Although gaming revenue growth has concerned investors, management is taking steps to resolve internal issues by enacting leadership changes, setting the stage for a turnaround. Comments on regulatory development were also reassuring. With earnings broadly in line with our estimates, we retain our fair value estimate of HKD 704 per share.

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Price vs Fair Value

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00700 is trading at a 53% discount.
Price
HKD 332.40
Fair Value
HKD 412.00
Uncertainty
High
1-Star Price
HKD 1,444.90
5-Star Price
HKD 141.60
Economic Moat
Ddcy
Capital Allocation
Jmmftfxtzf

Bulls Say, Bears Say

Bulls

Many of Tencent's products are still in the early stages of monetization.

Bears

Chinese regulators have become more assertive. There is always the possibility that the government may want more control over internet businesses by curbing monetization, limiting collection of user data, or restricting acquisitions.

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Trading Information

Previous Close Price
HKD 344.20
Day Range
HKD 336.40–346.40
52-Week Range
HKD 260.20–364.40
Bid/Ask
HKD 339.20 / HKD 339.40
Market Cap
HKD 3.20 Tril
Volume/Avg
27.7 Mil / 22.4 Mil

Key Statistics

Price/Earnings (Normalized)
18.67
Price/Sales
4.74
Dividend Yield (Trailing)
0.70%
Dividend Yield (Forward)
0.99%
Total Yield
2.27%

Company Profile

Tencent is arguably the most influential internet firm in China as one can hardly go by a day without using its products. Tencent is the world's largest video game vendor and owns the world's top-grossing mobile game--Honor of Kings. Tencent also runs China's largest social media super app--WeChat. The app is now part of the fabric of life for Chinese people who use it to chat, shop, watch videos, play games, order food and taxis, and more. Equally as impressive as its own portfolio, Tencent is also among the world's largest venture capital and investment corporations. The firm is now one of the largest shareholders in leading tech companies like Meituan, JD, DiDi, Snap, PDD, Kuaishou, Epic Games, and more.
Sector
Communication Services
Industry
Internet Content & Information
Stock Style Box
Large Core
Total Number of Employees
105,417
Website
http://www.tencent.com

Competitors

Valuation

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Metric
00700
00302
NTES
Price/Earnings (Normalized)
 18.67551.2314.75
Price/Book Value
 3.510.533.46
Price/Sales
 4.741.164.18
Price/Cash Flow
 15.0912.6812.38
Price/Earnings
00700
00302
NTES

Financial Strength

Metric
00700
00302
NTES
Quick Ratio
 1.301.242.67
Current Ratio
 1.471.712.91
Interest Coverage
 13.41−0.39—
Quick Ratio
00700
00302
NTES

Profitability

Metric
00700
00302
NTES
Return on Assets (Normalized)
 10.08%0.08%17.40%
Return on Equity (Normalized)
 20.37%0.09%27.16%
Return on Invested Capital (Normalized)
 12.97%0.21%19.65%
Return on Assets
00700
00302
NTES
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