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Tencent Holdings Ltd ADR TCEHY

Morningstar Rating
$36.94 +0.20 (0.54%)
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Company Report

Tencent Leverages Unrivaled Network Effects to Fuel Growth on Multiple Fronts

Over the past decade, Tencent has capitalized on the industry shift toward mobile gaming. The firm owns some of the world's most popular titles, like Honor of Kings and PUBG Mobile. To date, games remain Tencent's primary monetization model--as we estimate more than 40% of the group's operating income comes from this segment. Tencent should continue to leverage its unrivaled access to user data and financial capital to create innovative, high-quality, and long-cycle games with a mobile-first approach.

Price vs Fair Value

TCEHY is trading at a 59% discount.
Price
$36.94
Fair Value
$35.00
Uncertainty
High
1-Star Price
$488.80
5-Star Price
$26.00
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
$36.74
Day Range
$36.7037.14
52-Week Range
$33.0050.18
Bid/Ask
$36.91 / $37.00
Market Cap
$348.41 Bil
Volume/Avg
3.5 Mil / 3.3 Mil

Key Statistics

Price/Earnings (Normalized)
Price/Sales
4.23
Dividend Yield (Trailing)
0.83%
Dividend Yield (Forward)
0.83%
Total Yield
0.83%

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
105,309

Competitors

Valuation

Metric
TCEHY
BABA
NTES
Price/Earnings (Normalized)
8.2816.87
Price/Book Value
3.371.294.22
Price/Sales
4.231.444.86
Price/Cash Flow
12.437.0115.26
Price/Earnings
TCEHY
BABA
NTES

Financial Strength

Metric
TCEHY
BABA
NTES
Quick Ratio
1.131.712.67
Current Ratio
1.401.802.91
Interest Coverage
18.1293.02
Quick Ratio
TCEHY
BABA
NTES

Profitability

Metric
TCEHY
BABA
NTES
Return on Assets (Normalized)
8.75%8.98%17.40%
Return on Equity (Normalized)
17.61%15.96%27.16%
Return on Invested Capital (Normalized)
11.24%12.33%19.65%
Return on Assets
TCEHY
BABA
NTES
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Internet Content & Information Industry Comparables

Ticker
Name
Morningstar Rating for Stocks
Economic Moat
Market Cap
GOOGL
Alphabet Inc Class APpdz$1.8 Tril
GOOG
Alphabet Inc Class CLncd$1.8 Tril
META
Meta Platforms Inc Class AGmfv$1.2 Tril
DASH
DoorDash Inc Ordinary Shares - Class APzgxtlh$49.1 Bil
SPOT
Spotify Technology SARmgd$48.9 Bil
BIDU
Baidu Inc ADRQlq$38.3 Bil
PINS
Pinterest Inc Class AXmmmcc$24.4 Bil
SNAP
Snap Inc Class AWbsmc$17.7 Bil
TME
Tencent Music Entertainment Group ADRChygfp$17.6 Bil

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