SEHK:700

Stock Analysis Report

Tencent Holdings

Executive Summary

Tencent Holdings Limited, an investment holding company, provides Internet value-added services (VAS) and online advertising services in Mainland China, Hong Kong, North America, Europe, other Asian countries, and internationally.

Snowflake

Fundamentals

Excellent balance sheet with reasonable growth potential.


Similar Companies

Share Price & News

How has Tencent Holdings's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

1.9%

700

1.9%

HK Interactive Media and Services

0.9%

HK Market


1 Year Return

17.4%

700

17.1%

HK Interactive Media and Services

0.6%

HK Market

Return vs Industry: 700 matched the Hong Kong Interactive Media and Services industry which returned 17.1% over the past year.

Return vs Market: 700 exceeded the Hong Kong Market which returned 0.6% over the past year.


Shareholder returns

700IndustryMarket
7 Day1.9%1.9%0.9%
30 Day-2.2%-2.2%0.4%
90 Day-8.5%-8.6%-5.5%
1 Year17.7%17.4%17.4%17.1%4.2%0.6%
3 Year55.6%54.5%55.1%53.9%15.5%3.9%
5 Year180.5%177.0%141.8%138.1%19.9%-0.1%

Price Volatility Vs. Market

How volatile is Tencent Holdings's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Tencent Holdings undervalued compared to its fair value and its price relative to the market?

26.5%

Undervalued compared to fair value


Share Price vs. Fair Value

Undervalued: 700 (HK$331) is trading below our estimate of fair value (HK$450.6)

Significantly Undervalued: 700 is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: 700 is poor value based on its PE Ratio (31.8x) compared to the Interactive Media and Services industry average (11.3x).

PE vs Market: 700 is poor value based on its PE Ratio (31.8x) compared to the Hong Kong market (10.3x).


Price to Earnings Growth Ratio

Low PEG Ratio: 700 is poor value based on its PEG Ratio (2x)


Price to Book Ratio

PB vs Industry: 700 is overvalued based on its PB Ratio (7.3x) compared to the HK Interactive Media and Services industry average (1.6x).


Next Steps

Future Growth

How is Tencent Holdings forecast to perform in the next 1 to 3 years based on estimates from 42 analysts?

16.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 700's forecast earnings growth (16.1% per year) is above the savings rate (2%).

Earnings vs Market: 700's earnings (16.1% per year) are forecast to grow faster than the Hong Kong market (11.4% per year).

High Growth Earnings: 700's earnings are forecast to grow, but not significantly.

Revenue vs Market: 700's revenue (18.2% per year) is forecast to grow faster than the Hong Kong market (10.2% per year).

High Growth Revenue: 700's revenue (18.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

High Future ROE: 700's Return on Equity is forecast to be high in 3 years time (22.9%)


Next Steps

Past Performance

How has Tencent Holdings performed over the past 5 years?

31.3%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: 700's earnings have grown significantly by 31.3% per year over the past 5 years.

Accelerating Growth: 700's earnings growth over the past year (11.2%) is below its 5-year average (31.3% per year).

Earnings vs Industry: 700 earnings growth over the past year (11.2%) underperformed the Interactive Media and Services industry 11.8%.


Return on Equity

High ROE: 700's Return on Equity (21.4%) is considered high.


Return on Assets

ROA vs Industry: 700's Return on Assets is below or equal to the Interactive Media and Services industry average last year.


Return on Capital Employed

ROCE Improving: 700's Return on Capital Employed has declined over the past 3 years.


Next Steps

Financial Health

How is Tencent Holdings's financial position?


Financial Position Analysis

Short Term Liabilities: 700's short term assets (CN¥243.3B) exceeds its short term liabilities (CN¥201.9B)

Long Term Liabilities: 700's short term assets (243.3B) exceeds its long term liabilities (193.9B)


Debt to Equity History and Analysis

Debt Level: 700's debt to equity ratio (47.5%) is considered high

Reducing Debt: 700's debt to equity ratio has reduced from 49.6% to 47.5% over the past 5 years.

Debt Coverage: 700's debt is well covered by operating cash flow (58.4%).

Interest Coverage: 700 earns more interest than it pays, so coverage of interest payments is not a concern.


Balance Sheet

Inventory Level: 700 has a low level of unsold assets or inventory.

Debt Coverage by Assets: 700's debt is covered by short term assets (assets are 1.215210x debt).


Next Steps

Dividend

What is Tencent Holdings's current dividend yield, its reliability and sustainability?

0.29%

Current Dividend Yield


Dividend Yield vs Market

company0.3%marketbottom25%2.3%markettop25%6.3%industryaverage0.3%forecastin3Years0.4%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: 700's dividend (0.29%) isn’t notable compared to the bottom 25% of dividend payers in the Hong Kong market (2.26%).

High Dividend: 700's dividend (0.29%) is low compared to the top 25% of dividend payers in the Hong Kong market (6.25%).

Stable Dividend: 700 is not paying a notable dividend for the Hong Kong market, therefore no need to check if payments are stable.

Growing Dividend: 700 is not paying a notable dividend for the Hong Kong market, therefore no need to check if payments are increasing.


Current Payout to Shareholders

Dividend Coverage: 700 is not paying a notable dividend for the Hong Kong market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of 700's dividend in 3 years as they are not forecast to pay a notable one for the Hong Kong market.


Next Steps

Management

What is the CEO of Tencent Holdings's salary, the management and board of directors tenure and is there insider trading?

7.4yrs

Average management tenure


CEO

Pony Ma (47yo)

0yrs

Tenure

CN¥38,842,000

Compensation

Mr. Huateng Pony Ma, is the Co-Founder of Tencent Holdings Limited and serves as its Chairman and Chief Executive Officer. Mr. Ma serves as the Chief Executive Officer at Tencent Technology (Shenzhen) Co., ...


CEO Compensation Analysis

Compensation vs. Market: Pony's total compensation ($USD5.48M) is about average for companies of similar size in the Hong Kong market ($USD806.88K).

Compensation vs Earnings: Pony's compensation has been consistent with company performance over the past year.


Management Age and Tenure

7.4yrs

Average Tenure

47yo

Average Age

Experienced Management: 700's management team is seasoned and experienced (7.4 years average tenure).


Board Age and Tenure

14.0yrs

Average Tenure

63yo

Average Age

Experienced Board: 700's board of directors are seasoned and experienced ( 14 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyCN¥19,495,54030 Jul 19
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Max PriceCN¥372.05
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Shares21,719,346
Max PriceCN¥367.03
SellCN¥1,805,00004 Jul 19
Ian Charles Stone
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares5,000
Max PriceCN¥361.00
SellCN¥1,765,00004 Jul 19
Ian Charles Stone
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares5,000
Max PriceCN¥353.00
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Max PriceCN¥389.78
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Max PriceCN¥387.31
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Max PriceCN¥387.31
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Max PriceCN¥387.31
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Highbridge Capital Management, LLC
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Shares3,206,508
Max PriceCN¥387.31
SellCN¥1,267,582,86603 May 19
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Shares3,272,815
Max PriceCN¥387.31
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Shares121,455
Max PriceCN¥387.31
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Max PriceCN¥386.55
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SellCN¥11,209,88330 Apr 19
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SellCN¥2,624,081,91704 Apr 19
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Max PriceCN¥358.06
SellCN¥18,427,87623 Jan 19
Ian Charles Stone
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares55,000
Max PriceCN¥335.05
SellCN¥2,958,50027 Nov 18
Iain Ferguson Bruce
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares10,000
Max PriceCN¥295.85
SellCN¥5,994,20027 Nov 18
Iain Ferguson Bruce
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares20,500
Max PriceCN¥292.40

Ownership Breakdown


Management Team

  • Pony Ma (47yo)

    Co-Founder

    • Tenure: 0yrs
    • Compensation: CN¥38.84m
  • Jason Zeng (49yo)

    Co-Founder & Advisor Emeritus

    • Tenure: 0yrs
  • Daniel Xu (48yo)

    Co-Founder & Chief Information Officer

    • Tenure: 0yrs
  • Tony Zhang (47yo)

    Co-Founder & Advisor Emeritus

    • Tenure: 5.1yrs
    • Compensation: CN¥16.14m
  • Charles Chen (48yo)

    Co-Founder & Advisor Emeritus

    • Tenure: 6.6yrs
  • John Lo (50yo)

    CFO & Senior VP

    • Tenure: 7.4yrs
  • Martin Lau (46yo)

    President & Executive Director

    • Tenure: 12.6yrs
    • Compensation: CN¥313.47m
  • LS Lu (44yo)

    Senior EVP and President of Technology & Engineering Group

    • Tenure: 7.4yrs
  • Mark Ren (43yo)

    Chief Operating Officer

    • Tenure: 7.4yrs
  • Weibiao Zhan (47yo)

    Managing Director

    • Tenure: 0yrs

Board Members

  • Koos Bekker (66yo)

    Non-Executive Director

    • Tenure: 6.9yrs
  • Dong Li (62yo)

    Independent Non-Executive Director

    • Tenure: 15.5yrs
    • Compensation: CN¥2.83m
  • Iain Ferguson Bruce (78yo)

    Independent Non-Executive Director

    • Tenure: 15.5yrs
    • Compensation: CN¥4.86m
  • Pony Ma (47yo)

    Co-Founder

    • Tenure: 0yrs
    • Compensation: CN¥38.84m
  • Ian Charles Stone (68yo)

    Independent Non-Executive Director

    • Tenure: 15.5yrs
    • Compensation: CN¥5.23m
  • Silas Yang (64yo)

    Independent Non-Executive Director

    • Tenure: 3.3yrs
    • Compensation: CN¥3.20m
  • Martin Lau (46yo)

    President & Executive Director

    • Tenure: 12.6yrs
    • Compensation: CN¥313.47m
  • Charles St. Leger Searle (55yo)

    Non-Executive Director

    • Tenure: 18.3yrs
  • Yang Ke

    Independent Non Executive Director

    • Tenure: 0.2yrs

Company Information

Tencent Holdings Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Tencent Holdings Limited
  • Ticker: 700
  • Exchange: SEHK
  • Founded: 1998
  • Industry: Interactive Media and Services
  • Sector: Media
  • Market Cap: HK$3.144t
  • Shares outstanding: 9.50b
  • Website: https://www.tencent.com

Number of Employees


Location

  • Tencent Holdings Limited
  • Tencent Binhai Towers
  • No. 33 Haitian 2nd Road
  • Shenzhen
  • Guangdong Province
  • 518054
  • China

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
TCTZ.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJun 2004
NNNDWBAG (Wiener Boerse AG)YesOrdinary SharesATEURJun 2004
NNNDDB (Deutsche Boerse AG)YesOrdinary SharesDEEURJun 2004
0Z4SLSE (London Stock Exchange)YesOrdinary SharesGBHKDJun 2004
700SHSC (Stock Exchange of Hong Kong Limited - Shanghai - Hong Kong Stock Connect)YesOrdinary SharesHKHKDJun 2004
700SZSC (The Stock Exchange of Hong Kong - Shenzhen - Hong Kong Stock Connect)YesOrdinary SharesHKHKDJun 2004
700SEHK (The Stock Exchange of Hong Kong Ltd.)YesOrdinary SharesHKHKDJun 2004
NNN1DB (Deutsche Boerse AG)UNSPON ADRDEEUROct 2008
TCEH.YOTCPK (Pink Sheets LLC)UNSPON ADRUSUSDOct 2008
0LEALSE (London Stock Exchange)UNSPON ADRGBUSDOct 2008
NNN1WBAG (Wiener Boerse AG)UNSPON ADRATEUROct 2008
TCEHY NBMV (Bolsa Mexicana de Valores)UNSPON ADRMXMXNOct 2008

Biography

Tencent Holdings Limited, an investment holding company, provides Internet value-added services (VAS) and online advertising services in Mainland China, Hong Kong, North America, Europe, other Asian countr ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/19 12:42
End of Day Share Price2019/10/18 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.