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Tencent Holdings Ltd 00700

Morningstar Rating
HKD 303.80 −0.60 (0.20%)
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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 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.

Price vs Fair Value

00700 is trading at a 57% discount.
Price
HKD 304.40
Fair Value
HKD 248.00
Uncertainty
High
1-Star Price
HKD 9,717.50
5-Star Price
HKD 282.70
Economic Moat
Gdj
Capital Allocation
Cxdcdmnmkw

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.

Is it the right time to buy, sell, or hold?
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News

Trading Information

Previous Close Price
HKD 304.40
Day Range
HKD 299.60305.40
52-Week Range
HKD 260.20364.40
Bid/Ask
HKD 303.80 / HKD 304.00
Market Cap
HKD 2.86 Tril
Volume/Avg
19.5 Mil / 21.7 Mil

Key Statistics

Price/Earnings (Normalized)
17.10
Price/Sales
4.34
Dividend Yield (Trailing)
0.79%
Dividend Yield (Forward)
1.12%
Total Yield
2.48%

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
00700
00302
NTES
Price/Earnings (Normalized)
17.1024.9014.51
Price/Book Value
3.220.453.40
Price/Sales
4.340.974.11
Price/Cash Flow
13.829.2712.18
Price/Earnings
00700
00302
NTES

Financial Strength

Metric
00700
00302
NTES
Quick Ratio
1.301.542.67
Current Ratio
1.472.172.91
Interest Coverage
13.41−3.05
Quick Ratio
00700
00302
NTES

Profitability

Metric
00700
00302
NTES
Return on Assets (Normalized)
10.08%3.93%17.40%
Return on Equity (Normalized)
20.37%5.00%27.16%
Return on Invested Capital (Normalized)
12.97%4.93%19.65%
Return on Assets
00700
00302
NTES
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Morningstar Rating for Stocks
Capital Allocation
Economic Moat
Market Cap
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META
Meta Platforms Inc Class AScxzwqvhpzGgt$1.3 Tril
TCEHY
Tencent Holdings Ltd ADRTjxmgyvcQbxc$366.2 Bil
SPOT
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DASH
DoorDash Inc Ordinary Shares - Class AWfsprgcgVfrfhbg$52.6 Bil
BIDU
Baidu Inc ADRWyrtptjXjtj$33.5 Bil
PINS
Pinterest Inc Class AVqvyzfsxgFmnkbdw$22.5 Bil
TME
Tencent Music Entertainment Group ADRVlnbrjlkSxhmkm$19.7 Bil
SNAP
Snap Inc Class AFwgqqvydxMllm$19.2 Bil

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