Morningstar

Tencent Holdings Ltd 00700

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Stock XHKG Rating as of
HK$459.40 −10.60 (2.26%)
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As of Delayed Price Open

Company Report

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Tencent: Leveraging AI for Internal Growth

Ivan Su

We recently attended the Tencent Global Digital Ecosystem Summit in Shenzhen. Although the event did not disclose significant financial numbers, it did showcase Tencent's qualitative advancements in cloud and artificial intelligence. Our key takeaway is that Tencent's near-term AI monetization opportunities lie in bolstering the growth and efficiency of its internal operations rather than immediate external sales. While the summit doesn't move our HKD 704 fair value estimate, it does reinforce our view that Tencent will continue to lead in the field of AI in China.

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Price vs Fair Value

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00700 is trading within a range we consider fairly valued.
Price
HK$470.00
Fair Value
HK$841.00
Uncertainty
High
1-Star Price
HK$9,678.10
5-Star Price
HK$146.40
Economic Moat
Rxsdx
Capital Allocation
Qqhbfmjcp

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.

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News

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Trading Information

Previous Close Price
HK$470.00
Day Range
HK$456.80–475.00
52-Week Range
HK$260.20–479.60
Bid/Ask
HK$459.40 / HK$459.60
Market Cap
HK$4.22 Tril
Volume/Avg
12.7 Mil / 19.7 Mil

Key Statistics

Price/Earnings (Normalized)
20.79
Price/Sales
6.54
Dividend Yield (Trailing)
0.72%
Dividend Yield (Forward)
0.72%
Total Yield
2.65%

Company Profile

Tencent holds a prominent position in China's internet sector, with a diverse portfolio of products and services used daily by a significant portion of the population. The company is the world's largest video game publisher and owns Honor of Kings, a top-grossing mobile game globally. Tencent also operates WeChat, China's largest social media super app, which has become deeply integrated into the daily lives of Chinese people for communication, entertainment, shopping, and more. Beyond its offerings, Tencent is a significant player in global venture capital and investment. The company holds substantial stakes in leading tech companies, including PDD, Kuaishou, and Epic Games.
Sector
Communication Services
Industry
Internet Content & Information
Stock Style Box
Large Growth
Total Number of Employees
105,506
Website
http://www.tencent.com

Competitors

Valuation

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Metric
00700
00302
BIDU
Price/Earnings (Normalized)
 20.7954.729.96
Price/Book Value
 4.690.451.16
Price/Sales
 6.541.072.17
Price/Cash Flow
 17.6511.028.42
Price/Earnings
00700
00302
BIDU

Financial Strength

Metric
00700
00302
BIDU
Quick Ratio
 1.171.222.02
Current Ratio
 1.351.672.32
Interest Coverage
 16.38−12.436.19
Quick Ratio
00700
00302
BIDU

Profitability

Metric
00700
00302
BIDU
Return on Assets (Normalized)
 12.28%−3.98%5.18%
Return on Equity (Normalized)
 23.79%−4.93%8.71%
Return on Invested Capital (Normalized)
 15.34%−4.27%4.81%
Return on Assets
00700
00302
BIDU

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