SEHK:700

Stock Analysis Report

NOT FOR DISTRIBUTION
Header cover image

Tencent Holdings

Executive Summary

Tencent Holdings Limited, an investment holding company, provides value-added services (VAS) and Internet advertising services in Mainland China, the United States, Europe, and internationally. More Details


Snowflake Analysis

Excellent balance sheet with moderate 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

Stable Share Price: 700 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

2.1%

700

-1.2%

HK Interactive Media and Services

0.1%

HK Market


1 Year Return

76.6%

700

75.6%

HK Interactive Media and Services

2.0%

HK Market

Return vs Industry: 700 exceeded the Hong Kong Interactive Media and Services industry which returned 75.6% over the past year.

Return vs Market: 700 exceeded the Hong Kong Market which returned 2% over the past year.


Shareholder returns

700IndustryMarket
7 Day2.1%-1.2%0.1%
30 Day10.2%9.6%2.4%
90 Day6.7%1.7%-0.4%
1 Year77.1%76.6%76.1%75.6%6.3%2.0%
3 Year63.6%62.4%59.6%58.3%-5.7%-16.0%
5 Year285.7%280.7%280.3%275.1%16.4%-3.4%

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?

44.07x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: 700 (HK$563.5) is trading above our estimate of fair value (HK$433.15)

Significantly Below Fair Value: 700 is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: 700 is poor value based on its PE Ratio (44.1x) compared to the HK Interactive Media and Services industry average (11x).

PE vs Market: 700 is poor value based on its PE Ratio (44.1x) compared to the Hong Kong market (11.1x).


Price to Earnings Growth Ratio

PEG Ratio: 700 is poor value based on its PEG Ratio (2.6x)


Price to Book Ratio

PB vs Industry: 700 is overvalued based on its PB Ratio (8.6x) compared to the HK Interactive Media and Services industry average (1x).


Next Steps

Future Growth

How is Tencent Holdings forecast to perform in the next 1 to 3 years based on estimates from 44 analysts?

16.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 700's forecast earnings growth (16.6% per year) is above the savings rate (1.6%).

Earnings vs Market: 700's earnings (16.6% per year) are forecast to grow slower than the Hong Kong market (22.3% per year).

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

Revenue vs Market: 700's revenue (17.2% per year) is forecast to grow faster than the Hong Kong market (13.3% per year).

High Growth Revenue: 700's revenue (17.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 700's Return on Equity is forecast to be high in 3 years time (21.2%)


Next Steps

Past Performance

How has Tencent Holdings performed over the past 5 years?

26.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 700 has high quality earnings.

Growing Profit Margin: 700's current net profit margins (24.4%) are lower than last year (26.1%).


Past Earnings Growth Analysis

Earnings Trend: 700's earnings have grown significantly by 26% per year over the past 5 years.

Accelerating Growth: 700's earnings growth over the past year (17%) is below its 5-year average (26% per year).

Earnings vs Industry: 700 earnings growth over the past year (17%) exceeded the Interactive Media and Services industry 10.2%.


Return on Equity

High ROE: 700's Return on Equity (17.4%) is considered low.


Next Steps

Financial Health

How is Tencent Holdings's financial position?


Financial Position Analysis

Short Term Liabilities: 700's short term assets (CN¥341.4B) exceed its short term liabilities (CN¥254.6B).

Long Term Liabilities: 700's short term assets (CN¥341.4B) exceed its long term liabilities (CN¥298.7B).


Debt to Equity History and Analysis

Debt Level: 700's debt to equity ratio (45.2%) is considered high.

Reducing Debt: 700's debt to equity ratio has reduced from 47.9% to 45.2% over the past 5 years.

Debt Coverage: 700's debt is well covered by operating cash flow (70.7%).

Interest Coverage: 700's interest payments on its debt are well covered by EBIT (312.4x coverage).


Balance Sheet


Next Steps

Dividend

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

0.21%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: 700's dividend (0.21%) isn’t notable compared to the bottom 25% of dividend payers in the Hong Kong market (2.23%).

High Dividend: 700's dividend (0.21%) is low compared to the top 25% of dividend payers in the Hong Kong market (6.86%).


Stability and Growth of Payments

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

How experienced are the management team and are they aligned to shareholders interests?

8.4yrs

Average management tenure


CEO

Pony Ma (48 yo)

no data

Tenure

CN¥46,625,000

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 ($USD7.01M) is above average for companies of similar size in the Hong Kong market ($USD839.75K).

Compensation vs Earnings: Pony's compensation has increased by more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Huateng Pony Ma
Co-Founderno dataCN¥46.63m7.46%
CN¥ 402.1b
Chi Ping Lau
President & Executive Director13.58yrsCN¥354.76m0.31%
CN¥ 16.6b
Liqing Zeng
Co-Founder & Advisor Emeritusno datano datano data
Chenye Xu
Co-Founder & Chief Information Officerno datano datano data
Zhidong Zhang
Co-Founder & Advisor Emeritus6.08yrsCN¥16.14mno data
Yidan Chen
Co-Founder & Advisor Emeritus7.58yrsno datano data
Weibiao Zhan
Managing Directorno datano datano data
Shek Hon Lo
CFO & Senior VP8.42yrsno datano data
Yuxin Ren
Chief Operating Officer8.42yrsno datano data
Shan Lu
Senior EVP and President of Technology & Engineering Group8.42yrsno datano data
Jane Yip
Assistant General Manager of Investor Relations & Global Communicationsno datano datano data
Seng Yee Lau
Senior EVP and Chairman of Group Marketing & Global Branding3.5yrsno datano data

8.4yrs

Average Tenure

48yo

Average Age

Experienced Management: 700's management team is seasoned and experienced (8.4 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Huateng Pony Ma
Co-Founderno dataCN¥46.63m7.46%
CN¥ 402.1b
Chi Ping Lau
President & Executive Director13.58yrsCN¥354.76m0.31%
CN¥ 16.6b
Jacobus Bekker
Non-Executive Director7.92yrsno datano data
Dong Li
Independent Non-Executive Director16.5yrsCN¥3.00m0.000090%
CN¥ 4.9m
Iain Ferguson Bruce
Independent Non-Executive Director16.5yrsCN¥4.75m0.0035%
CN¥ 187.0m
Ian Charles Stone
Independent Non-Executive Director16.5yrsCN¥5.56m0.0027%
CN¥ 147.7m
Siu Shun Yang
Independent Non-Executive Director4.25yrsCN¥4.34m0.00013%
CN¥ 7.0m
Charles St. Leger Searle
Non-Executive Director19.33yrsno datano data
Yang Ke
Independent Non Executive Director1.17yrsCN¥1.02m0.000020%
CN¥ 1.1m

15.0yrs

Average Tenure

64yo

Average Age

Experienced Board: 700's board of directors are seasoned and experienced ( 15 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: 700 insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

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$5.390t
  • Shares outstanding: 9.51b
  • 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
700SEHK (The Stock Exchange of Hong Kong Ltd.)YesOrdinary SharesHKHKDJun 2004
NNNDDB (Deutsche Boerse AG)YesOrdinary SharesDEEURJun 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
0Z4SLSE (London Stock Exchange)YesOrdinary SharesGBHKDJun 2004
NNNDWBAG (Wiener Boerse AG)YesOrdinary SharesATEURJun 2004
TENCH NBMV (Bolsa Mexicana de Valores)YesOrdinary SharesMXMXNJun 2004
TCEH.YOTCPK (Pink Sheets LLC)UNSPON ADRUSUSDOct 2008
NNN1DB (Deutsche Boerse AG)UNSPON ADRDEEUROct 2008
TCEHY NBMV (Bolsa Mexicana de Valores)UNSPON ADRMXMXNOct 2008
0LEALSE (London Stock Exchange)UNSPON ADRGBUSDOct 2008
NNN1WBAG (Wiener Boerse AG)UNSPON ADRATEUROct 2008

Biography

Tencent Holdings Limited, an investment holding company, provides value-added services (VAS) and Internet advertising services in Mainland China, the United States, Europe, and internationally. The company ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/10/22 12:33
End of Day Share Price2020/10/22 00:00
Earnings2020/06/30
Annual Earnings2019/12/31


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.