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Tencent Holdings Ltd ADR TCEHY

Morningstar Rating
$38.99 +0.08 (0.21%)
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Company Report

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

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 dividend, 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.

Price vs Fair Value

TCEHY is trading within a range we consider fairly valued.
Price
$36.95
Fair Value
$35.00
Uncertainty
High
1-Star Price
$594.10
5-Star Price
$15.00
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

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

Bears

Chinese regulators have become more assertive in recent years. 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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News

Trading Information

Previous Close Price
$38.91
Day Range
$38.7639.13
52-Week Range
$33.0050.18
Bid/Ask
$38.99 / $39.00
Market Cap
$368.61 Bil
Volume/Avg
1.4 Mil / 2.9 Mil

Key Statistics

Price/Earnings (Normalized)
22.20
Price/Sales
4.34
Dividend Yield (Trailing)
0.79%
Dividend Yield (Forward)
0.79%
Total Yield
0.79%

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

Competitors

Valuation

Metric
TCEHY
NTES
BABA
Price/Earnings (Normalized)
22.2016.278.08
Price/Book Value
3.233.811.26
Price/Sales
4.344.611.41
Price/Cash Flow
11.9213.656.84
Price/Earnings
TCEHY
NTES
BABA

Financial Strength

Metric
TCEHY
NTES
BABA
Quick Ratio
1.232.671.71
Current Ratio
1.412.911.80
Interest Coverage
19.4493.02
Quick Ratio
TCEHY
NTES
BABA

Profitability

Metric
TCEHY
NTES
BABA
Return on Assets (Normalized)
8.73%17.40%8.98%
Return on Equity (Normalized)
17.65%27.16%15.96%
Return on Invested Capital (Normalized)
11.22%19.65%12.33%
Return on Assets
TCEHY
NTES
BABA
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Name
Morningstar Rating for Stocks
Capital Allocation
Economic Moat
Market Cap
GOOGL
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GOOG
Alphabet Inc Class CZdbcwqgvnFms$1.9 Tril
META
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DASH
DoorDash Inc Ordinary Shares - Class AQnfpwdfhSfbmv$56.1 Bil
SPOT
Spotify Technology SAFjtrmxlpqKtwd$51.6 Bil
BIDU
Baidu Inc ADRWygjqmkDkb$35.7 Bil
PINS
Pinterest Inc Class ABkywwnbjYlbhbgg$23.7 Bil
TME
Tencent Music Entertainment Group ADRCqystzvBzjyn$18.9 Bil
SNAP
Snap Inc Class AYjjkfbbSnn$18.9 Bil

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