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Tencent Holdings Ltd ADR TCEHY

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Morningstar’s Analysis

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Following Tencent's Solid Q3 Result, FVE Increased to HKD 658 per Share

Dan Baker Senior Equity Analyst

Analyst Note

| Dan Baker |

We are increasing wide-moat Tencent’s fair value estimate by 10% to HKD 658 (USD 84.40) per share from HKD 600 (USD 77) per share, as we lifted our revenue estimate for the gaming businesses, increased the market valuation of investments and adjusted CNY/HKD exchange rate. The third-quarter result was largely positive in our view and taking into account the likely limited effect of the antitrust rules on Tencent, we think the shares are undervalued.

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Company Profile

Business Description

Tencent is a Chinese Internet giant with businesses and investments in a wide variety of Internet services and contents. Major services include communication and social networking (Weixin/WeChat and QQ), online PC and mobile games, content (news, videos, music, comics, and literature), utilities (email, app store, mobile security, and mobile browser), the cloud, and financial technology. Tenpay in Weixin/WeChat and QQ is a payment solution that enables closed-loop transactions in Tencent’s ecosystems and has been adopted by many third-party partners and offline merchants. Tencent has an aggregate monthly active user base of over 600 million for QQ and 1.2 billion for Weixin/WeChat.

No. 33 Haitian 2nd Road, Tencent Binhai Towers
Shenzhen, 518054, Cayman Islands
T +86 75586013388
Sector Communication Services
Industry Internet Content & Information
Most Recent Earnings Jun 30, 2020
Fiscal Year End Dec 31, 2020
Stock Type
Employees 70,756