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Tencent Holdings

SEHK:700
Snowflake Description

Excellent balance sheet with reasonable growth potential.

The Snowflake is generated from 30 checks in 5 different areas, read more below.
700
SEHK
HK$3,321B
Market Cap
  1. Home
  2. HK
  3. Media
Company description

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. The last earnings update was 20 days ago. More info.


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700 Share Price and Events
7 Day Returns
1.8%
SEHK:700
1.8%
HK Interactive Media and Services
2.5%
HK Market
1 Year Returns
5.9%
SEHK:700
5.6%
HK Interactive Media and Services
-3.9%
HK Market
700 Shareholder Return
  7 Day 30 Day 90 Day 1 Year 3 Year 5 Year
Tencent Holdings (700) 1.8% 7.1% 6.3% 5.9% 66.6% 179.2%
HK Interactive Media and Services 1.8% 5.8% 5.6% 5.6% 65.9% 149.4%
HK Market 2.5% 7.6% 0.8% -3.9% 7.6% -1.7%
1 Year Return vs Industry and Market
  • 700 matched the Interactive Media and Services industry (5.6%) over the past year.
  • 700 outperformed the Market in Hong Kong which returned -3.9% over the past year.
Price Volatility
700
Industry
5yr Volatility vs Market
Related Companies

700 Value

 Is Tencent Holdings undervalued based on future cash flows and its price relative to the stock market?

Value is all about what a company is worth versus what price it is available for. If you went into a grocery store and all the bananas were on sale at half price, they could be considered undervalued.
INTRINSIC VALUE BASED ON FUTURE CASH FLOWS
Here we compare the current share price of Tencent Holdings to its discounted cash flow analysis.value.

The discounted cash flow value is simply looking at what the company is worth today, based on estimates of how much money it is expected to make in the future.
Raw Data

Below are the data sources, inputs and calculation used to determine the intrinsic value for Tencent Holdings.

SEHK:700 Discounted Cash Flow Data Sources
Data Point Source Value
Valuation Model 2 Stage Free Cash Flow to Equity
Levered Free Cash Flow Average of 43 Analyst Estimates (S&P Global) See below
Discount Rate (Cost of Equity) See below 8.3%
Perpetual Growth Rate 10-Year HK Government Bond Rate 2%

An important part of a discounted cash flow is the discount rate, below we explain how it has been calculated.

Calculation of Discount Rate/ Cost of Equity for SEHK:700
Data Point Calculation/ Source Result
Risk-Free Rate 10-Year HK Govt Bond Rate 2%
Equity Risk Premium S&P Global 6%
Interactive Media and Services Unlevered Beta Simply Wall St/ S&P Global 1.02
Re-levered Beta = Unlevered beta (1 + (1- tax rate) (Debt/Equity))
= 1.022 (1 + (1- 25%) (7.04%))
1.051
Levered Beta Levered Beta limited to 0.8 to 2.0
(practical range for a stable firm)
1.05
Discount Rate/ Cost of Equity = Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium)
= 2% + (1.051 * 5.96%)
8.26%

Discounted Cash Flow Calculation for SEHK:700 using 2 Stage Free Cash Flow to Equity Model

The calculations below outline how an intrinsic value for Tencent Holdings is arrived at by discounting future cash flows to their present value using the 2 stage method. We try to start with analysts estimates of free cash flow, however if these are not available we use the most recent financial results. In the 1st stage we continue to grow the free cash flow over a 10 year period, with the growth rate trending towards the perpetual growth rate used in the 2nd stage. The 2nd stage assumes the company grows at a stable rate into perpetuity.

Note: Free cash flow to equity valuations ignore the company's cash or debt.

SEHK:700 DCF 1st Stage: Next 10 year cash flow forecast
Levered FCF (CNY, Millions) Source Present Value
Discounted (@ 8.26%)
2020 131,646.99 Analyst x15 121,597.06
2021 160,672.33 Analyst x13 137,077.25
2022 175,594.08 Analyst x4 138,371.40
2023 209,942.00 Analyst x2 152,808.64
2024 232,881.21 Est @ 10.93% 156,565.19
2025 252,092.56 Est @ 8.25% 156,542.73
2026 268,164.70 Est @ 6.38% 153,810.73
2027 281,743.87 Est @ 5.06% 149,262.83
2028 293,423.62 Est @ 4.15% 143,583.46
2029 303,701.56 Est @ 3.5% 137,267.75
Present value of next 10 years cash flows CN¥1,446,887.00
SEHK:700 DCF 2nd Stage: Terminal Value
Calculation Result
Terminal Value = FCF2029 × (1 + g) ÷ (Discount Rate – g)
= CN¥303,701.56 × (1 + 2%) ÷ (8.26% – 2%)
CN¥4,947,101.93
Present Value of Terminal Value = Terminal Value ÷ (1 + r)10
= CN¥4,947,101.93 ÷ (1 + 8.26%)10
CN¥2,236,002.80
SEHK:700 Total Equity Value
Calculation Result
Total Equity Value = Present value of next 10 years cash flows + Terminal Value
= CN¥1,446,887.00 + CN¥2,236,002.80
CN¥3,682,889.80
Equity Value per Share
(CNY)
= Total value / Shares Outstanding
= CN¥3,682,889.80 / 9,499.51
CN¥387.69
SEHK:700 Discount to Share Price
Calculation Result
Exchange Rate CNY/HKD
(Reporting currency to currency of SEHK:700)
1.105
Value per Share
(HKD)
= Value per Share in CNY x Exchange Rate (CNY/HKD)
= CN¥387.69 x 1.105
HK$428.57
Value per share (HKD) From above. HK$428.57
Current discount Discount to share price of HK$349.60
= -1 x (HK$349.60 - HK$428.57) / HK$428.57
18.4%

Learn more about our DCF calculations in Simply Wall St’s analysis model .

Current Discount
Amount off the current price Tencent Holdings is available for.
Intrinsic value
18%
Share price is HK$349.6 vs Future cash flow value of HK$428.57
Current Discount Checks
For Tencent Holdings to be considered undervalued it must be available for at least 20% below the current price. Less than 40% is even better.
  • Tencent Holdings's share price is below the future cash flow value, but not at a moderate discount (< 20%).
  • Tencent Holdings's share price is below the future cash flow value, but not at a substantial discount (< 40%).
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing when they are out of season, or how much your home is worth.

The amount the stock market is willing to pay for Tencent Holdings's earnings, growth and assets is considered below, and whether this is a fair price.
Price based on past earnings
Are Tencent Holdings's earnings available for a low price, and how does this compare to other companies in the same industry?
Raw Data
SEHK:700 PE (Price to Earnings) Ratio Data Sources
Data Point Source Value
Earnings Per Share * Company Filings (2019-06-30) in CNY CN¥9.40
SEHK:700 Share Price ** SEHK (2019-09-13) in HKD HK$349.6
SEHK:700 Share Price converted to CNY reporting currency Exchange rate (HKD/ CNY) 0.905 CN¥316.26
Hong Kong Interactive Media and Services Industry PE Ratio Median Figure of 10 Publicly-Listed Interactive Media and Services Companies 14.19x
Hong Kong Market PE Ratio Median Figure of 1,462 Publicly-Listed Companies 10.7x

* Trailing twelve months (TTM) annual GAAP earnings per share excluding extraordinary items.

** Primary Listing of Tencent Holdings.

SEHK:700 PE (Price to Earnings) Ratio Calculation
Calculation Outcome
PE Ratio

= SEHK:700 Share Price ÷ EPS (both in CNY)

= 316.26 ÷ 9.40

33.64x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Tencent Holdings is overvalued based on earnings compared to the HK Interactive Media and Services industry average.
  • Tencent Holdings is overvalued based on earnings compared to the Hong Kong market.
Price based on expected Growth
Does Tencent Holdings's expected growth come at a high price?
Raw Data
SEHK:700 PEG (Price to Earnings to Growth) Ratio Data Sources
Data Point Source Value
PE Ratio See PE Ratio Section 33.64x
Net Income Annual Growth Rate See Future Growth Section.
Line of Best Fit* through Consensus Estimate Earnings of 43 Analysts
16%per year
Asia Interactive Media and Services Industry PEG Ratio Median Figure of 14 Publicly-Listed Interactive Media and Services Companies 1.6x
Hong Kong Market PEG Ratio Median Figure of 480 Publicly-Listed Companies 0.75x

*Line of best fit is calculated by linear regression .

SEHK:700 PEG (Price to Earnings to Growth) Ratio Calculation
Calculation Outcome
PEG Ratio

= PE Ratio ÷ Net Income Annual Growth Rate

= 33.64x ÷ 16%

2.1x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Tencent Holdings is poor value based on expected growth next year.
Price based on value of assets
What value do investors place on Tencent Holdings's assets?
Raw Data
SEHK:700 PB (Price to Book) Ratio Data Sources
Data Point Source Value
Book Value per Share Company Filings (2019-06-30) in CNY CN¥40.83
SEHK:700 Share Price * SEHK (2019-09-13) in HKD HK$349.6
SEHK:700 Share Price converted to CNY reporting currency Exchange rate (HKD/ CNY) 0.905 CN¥316.26
Hong Kong Interactive Media and Services Industry PB Ratio Median Figure of 13 Publicly-Listed Interactive Media and Services Companies 1.95x
Hong Kong Market PB Ratio Median Figure of 2,183 Publicly-Listed Companies 0.86x
SEHK:700 PB (Price to Book) Ratio Calculation
Calculation Outcome
PB Ratio

= SEHK:700 Share Price ÷ Book Value per Share (both in CNY)

= 316.26 ÷ 40.83

7.75x

* Primary Listing of Tencent Holdings.

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Tencent Holdings is overvalued based on assets compared to the HK Interactive Media and Services industry average.
X
Value checks
We assess Tencent Holdings's value by looking at:
  1. Is the discounted cash flow value less than 20%, or 40% of the share price? (2 checks) ( Click here or on bar chart for details of DCF calculation. )
  2. Is the PE ratio less than the market average, and/ or less than the Interactive Media and Services industry average (and greater than 0)? (2 checks)
  3. Is the PEG ratio within a reasonable range (0 to 1)? (1 check)
  4. Is the PB ratio less than the Interactive Media and Services industry average (and greater than 0)? (1 check)
  5. Tencent Holdings has a total score of 0/6, see the detailed checks below.

    Note: We use GAAP Earnings per Share in all our calculations including PE and PEG Ratio.

    Full details on the Value part of the Simply Wall St company analysis model.

700 Future Performance

 How is Tencent Holdings expected to perform in the next 1 to 3 years based on estimates from 43 analysts?

The future performance of a company is measured in the same way as past performance, by looking at estimated growth and how much profit it is expected to make.

Future estimates come from professional analysts. Just like forecasting the weather, they don’t always get it right!
Annual Growth Rate
16%
Expected annual growth in earnings.
Earnings growth vs Low Risk Savings
Is Tencent Holdings expected to grow at an attractive rate?
  • Tencent Holdings's earnings growth is expected to exceed the low risk savings rate of 2%.
Growth vs Market Checks
  • Tencent Holdings's earnings growth is expected to exceed the Hong Kong market average.
  • Tencent Holdings's revenue growth is expected to exceed the Hong Kong market average.
Annual Growth Rates Comparison
Raw Data
SEHK:700 Future Growth Rates Data Sources
Data Point Source Value (per year)
SEHK:700 Future Earnings Growth Rate Line of Best Fit* through Consensus Estimate Earnings of 43 Analysts 16%
SEHK:700 Future Revenue Growth Rate Line of Best Fit* through Consensus Estimate Revenue of 43 Analysts 18.5%
Hong Kong Interactive Media and Services Industry Earnings Growth Rate Market Cap Weighted Average 16.3%
Hong Kong Interactive Media and Services Industry Revenue Growth Rate Market Cap Weighted Average 18.6%
Hong Kong Market Earnings Growth Rate Market Cap Weighted Average 11.3%
Hong Kong Market Revenue Growth Rate Market Cap Weighted Average 10.4%

*Line of best fit is calculated by linear regression .

Industry and Market average data is calculated daily.

Learn more about our growth rate calculations in Simply Wall St’s analysis model.

Analysts growth expectations
Raw Data
SEHK:700 Analysts Growth Expectations Data Sources
Data Point Source Value
Past Financials Company Filings (2 months ago) See Below
Future Estimates Average of up to 43 Analyst Estimates (S&P Global) See Below
All numbers in CNY Millions and using Trailing twelve months (TTM) annual period rather than quarterly.
SEHK:700 Future Estimates Data
Date (Data in CNY Millions) Revenue Cash Flow Net Income * Avg. No. Analysts
2023-12-31 814,290 1
2022-12-31 709,061 171,280 2
2021-12-31 579,920 210,520 134,636 33
2020-12-31 474,277 180,037 111,091 43
2019-12-31 381,083 148,558 96,583 41
2019-09-15
SEHK:700 Past Financials Data
Date (Data in CNY Millions) Revenue Cash Flow Net Income *
2019-06-30 339,777 116,982 88,908
2019-03-31 324,631 114,489 82,639
2018-12-31 312,694 106,443 78,719
2018-09-30 294,190 101,816 85,287
2018-06-30 278,805 102,323 79,960
2018-03-31 261,736 100,279 80,324
2017-12-31 237,760 106,140 71,510
2017-09-30 215,232 97,546 61,242
2017-06-30 190,410 83,751 53,882
2017-03-31 169,495 75,216 46,388
2016-12-31 151,938 65,518 41,095
2016-09-30 138,515 63,709 37,730

*GAAP earnings excluding extraordinary items.

Super high growth metrics
High Growth Checks
  • Tencent Holdings's earnings are expected to grow by 16% yearly, however this is not considered high growth (20% yearly).
  • Tencent Holdings's revenue is expected to grow by 18.5% yearly, however this is not considered high growth (20% yearly).
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can be gauged below. We look back 3 years and see if they were any good at predicting what actually occurred. We also show the highest and lowest estimates looking forward to see if there is a wide range.
Raw Data
SEHK:700 Past and Future Earnings per Share
Data Point Source Value
Past Financials Company Filings (2 months ago) See Below
Future Estimates Average of up to 43 Analyst Estimates (S&P Global) See Below

All data from Tencent Holdings Company Filings, last reported 2 months ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

SEHK:700 Future Estimates Data
Date (Data in CNY Millions) EPS * EPS High Estimate EPS Low Estimate Avg. No. Analysts
2023-12-31
2022-12-31
2021-12-31 13.81 17.25 9.87 27.00
2020-12-31 11.33 13.95 8.66 36.00
2019-12-31 10.00 11.16 7.58 36.00
2019-09-15
SEHK:700 Past Financials Data
Date (Data in CNY Millions) EPS *
2019-06-30 9.40
2019-03-31 8.74
2018-12-31 8.34
2018-09-30 9.04
2018-06-30 8.48
2018-03-31 8.53
2017-12-31 7.60
2017-09-30 6.51
2017-06-30 5.74
2017-03-31 4.94
2016-12-31 4.38
2016-09-30 4.03

*GAAP earnings excluding extraordinary items.

Performance in 3 years
In the same way as past performance we look at the future estimated return (profit) compared to the available funds. We do this looking forward 3 years.
  • Tencent Holdings is expected to efficiently use shareholders’ funds in the future (Return on Equity greater than 20%).
X
Future performance checks
We assess Tencent Holdings's future performance by looking at:
  1. Is the annual earnings growth rate expected to beat the low risk savings rate, plus a premium to keep pace with inflation?
  2. Is the annual earnings growth rate expected to beat the average growth rate in earnings of the Hong Kong market? (1 check)
  3. Is the annual revenue growth rate expected to beat the average growth rate in revenue of the Hong Kong market? (1 check)
  4. Is the annual earnings growth rate expected to be above 20%? (1 check)
  5. Is the annual revenue growth rate expected to be above 20%? (1 check)
  6. Is the Return on Equity in 3 years expected to be over 20%? (1 check)
Some of the above checks will fail if the company is expected to be loss making in the relevant year.
Tencent Holdings has a total score of 4/6, see the detailed checks below.

Note 1: We use GAAP Net Income Excluding Exceptional Items for our Earnings in all our calculations.

Full details on the Future part of the Simply Wall St company analysis model.

700 Past Performance

  How has Tencent Holdings performed over the past 5 years?

The past performance of a company can be measured by how much growth it has experienced and how much profit it makes relative to the funds and assets it has available.
Past earnings growth
Below we compare Tencent Holdings's growth in the last year to its industry (Interactive Media and Services).
Past Earnings growth analysis
We also check if the company has grown in the past 5 years, and whether it has maintained that growth in the year.
  • Tencent Holdings has delivered over 20% year on year earnings growth in the past 5 years.
  • Tencent Holdings's 1-year earnings growth is less than its 5-year average (11.2% vs 31.3%)
  • Tencent Holdings's earnings growth has not exceeded the HK Interactive Media and Services industry average in the past year (11.2% vs 11.8%).
Earnings and Revenue History
Tencent Holdings's revenue and profit over the past 5 years is shown below, any years where they have experienced a loss will show up in red.
Raw Data

All data from Tencent Holdings Company Filings, last reported 2 months ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

SEHK:700 Past Revenue, Cash Flow and Net Income Data
Date (Data in CNY Millions) Revenue Net Income * G+A Expenses R&D Expenses
2019-06-30 339,777.00 88,908.00 67,408.00
2019-03-31 324,631.00 82,639.00 66,330.00
2018-12-31 312,694.00 78,719.00 65,755.00
2018-09-30 294,190.00 85,287.00 63,513.00
2018-06-30 278,805.00 79,960.00 59,920.00
2018-03-31 261,736.00 80,324.00 55,533.00
2017-12-31 237,760.00 71,510.00 50,703.00
2017-09-30 215,232.00 61,242.00 47,241.00
2017-06-30 190,410.00 53,882.00 42,531.00
2017-03-31 169,495.00 46,388.00 38,365.00
2016-12-31 151,938.00 41,095.00 34,595.00
2016-09-30 138,515.00 37,730.00 31,014.00
2016-06-30 124,721.00 34,529.00 28,276.00
2016-03-31 112,459.00 31,106.00 26,224.00
2015-12-31 102,863.00 28,806.00 24,818.00
2015-09-30 93,400.00 27,502.00 23,066.00
2015-06-30 86,614.00 25,714.00 22,340.00
2015-03-31 82,931.00 24,236.00 22,154.00
2014-12-31 78,932.00 23,810.00 21,952.00
2014-09-30 74,924.00 21,861.00 20,717.00
2014-06-30 70,651.00 20,071.00 19,107.00
2014-03-31 65,289.00 17,915.00 17,316.00
2013-12-31 60,437.00 15,502.00 15,683.00
2013-09-30 55,620.34 15,054.72 14,099.80
2013-06-30 51,650.90 14,406.42 12,858.89
2013-03-31 47,794.14 13,826.49 11,695.73
2012-12-31 43,894.00 12,732.00 10,760.00
2012-09-30 39,663.11 11,805.30 9,836.89

*GAAP earnings excluding extraordinary items.

Performance last year
We want to ensure a company is making the most of what it has available. This is done by comparing the return (profit) to a company's available funds, assets and capital.
  • Tencent Holdings has efficiently used shareholders’ funds last year (Return on Equity greater than 20%).
  • Tencent Holdings used its assets less efficiently than the HK Interactive Media and Services industry average last year based on Return on Assets.
  • Tencent Holdings's use of capital deteriorated last year versus 3 years ago (Return on Capital Employed).
X
Past performance checks
We assess Tencent Holdings's performance over the past 5 years by checking for:
  1. Has earnings increased in past 5 years? (1 check)
  2. Has the earnings growth in the last year exceeded that of the Interactive Media and Services industry? (1 check)
  3. Is the recent earnings growth over the last year higher than the average annual growth over the past 5 years? (1 check)
  4. Is the Return on Equity (ROE) higher than 20%? (1 check)
  5. Is the Return on Assets (ROA) above industry average? (1 check)
  6. Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent earnings report. Some checks require at least 3 or 5 years worth of data.
Tencent Holdings has a total score of 2/6, see the detailed checks below.

Note: We use GAAP Net Income excluding extraordinary items in all our calculations.

Full details on the Past part of the Simply Wall St company analysis model.

700 Health

 How is Tencent Holdings's financial health and their level of debt?

A company's financial position is much like your own financial position, it includes everything you own (assets) and owe (liabilities).

The boxes below represent the relative size of what makes up Tencent Holdings's finances.

The net worth of a company is the difference between its assets and liabilities.
Net Worth
  • Tencent Holdings is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
  • Tencent Holdings's cash and other short term assets cover its long term commitments.
Balance sheet
This treemap shows a more detailed breakdown of Tencent Holdings's finances. If any of them are yellow this indicates they may be out of proportion and red means they relate to one of the checks below.
Assets
Liabilities and shares
The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
  • Low level of unsold assets.
  • Debt is covered by short term assets, assets are 1.2x debt.
Historical Debt
Nearly all companies have debt. Debt in itself isn’t bad, however if the debt is too high, or the company can’t afford to pay the interest on its debts this may have impacts in the future.

The graphic below shows equity (available funds) and debt, we ideally want to see the red area (debt) decreasing.

If there is any debt we look at the companies capability to repay it, and whether the level has increased over the past 5 years.
Raw Data

All data from Tencent Holdings Company Filings, last reported 2 months ago.

SEHK:700 Past Debt and Equity Data
Date (Data in CNY Millions) Total Equity Total Debt Cash & Short Term Investments
2019-06-30 421,032.00 200,192.00 184,534.00
2019-03-31 398,303.00 184,272.00 176,198.00
2018-12-31 356,207.00 179,289.00 166,934.00
2018-09-30 342,762.00 173,700.00 144,351.00
2018-06-30 320,742.00 169,477.00 134,081.00
2018-03-31 301,055.00 157,059.00 142,381.00
2017-12-31 277,093.00 131,905.00 142,421.00
2017-09-30 244,905.00 131,935.00 144,714.00
2017-06-30 226,398.00 116,592.00 131,775.00
2017-03-31 205,687.00 114,284.00 135,492.00
2016-12-31 186,247.00 109,497.00 122,222.00
2016-09-30 173,949.00 91,968.00 94,922.00
2016-06-30 144,121.00 84,977.00 99,980.00
2016-03-31 129,109.00 71,930.00 90,326.00
2015-12-31 122,100.00 65,917.00 80,769.00
2015-09-30 111,003.00 54,125.00 71,690.00
2015-06-30 100,224.00 48,019.00 65,600.00
2015-03-31 90,670.00 48,532.00 69,730.00
2014-12-31 82,124.00 36,073.00 53,511.00
2014-09-30 75,394.00 34,297.00 50,649.00
2014-06-30 70,475.00 35,012.00 50,778.00
2014-03-31 65,006.00 18,267.00 44,097.00
2013-12-31 58,463.00 15,053.00 39,851.00
2013-09-30 53,686.82 15,223.37 36,003.80
2013-06-30 47,451.78 10,237.06 30,712.55
2013-03-31 45,582.24 10,383.51 30,493.19
2012-12-31 42,148.00 10,700.00 27,189.00
2012-09-30 38,292.63 12,822.52 27,723.17
  • Tencent Holdings's level of debt (47.5%) compared to net worth is high (greater than 40%).
  • The level of debt compared to net worth has been reduced over the past 5 years (49.6% vs 47.5% today).
  • Debt is well covered by operating cash flow (58.4%, greater than 20% of total debt).
  • Tencent Holdings earns more interest than it pays, coverage of interest payments is not a concern.
X
Financial health checks
We assess Tencent Holdings's financial health by checking for:
  1. Are short term assets greater than short term liabilities? (1 check)
  2. Are short term assets greater than long term liabilities? (1 check)
  3. Has the debt to equity ratio increased in the past 5 years? (1 check)
  4. Is the debt to equity ratio over 40%? (1 check)
  5. Is the debt covered by operating cash flow? (1 check)
  6. Are earnings greater than 5x the interest on debt (if company pays interest at all)? (1 check)
  7. Tencent Holdings has a total score of 5/6, see the detailed checks below.
For companies that are loss making and have been so on average in the past we replace the last 2 checks with:
  1. Does cash and short term investments cover stable operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)
  2. Does cash and short term investments cover growing operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)


Full details on the Health part of the Simply Wall St company analysis model.

700 Dividends

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

Dividends are regular cash payments to you from the company, similar to a bank paying you interest on a savings account.
Annual Dividend Income
Dividend payments
0.27%
Current annual income from Tencent Holdings dividends. Estimated to be 0.4% next year.
If you bought HK$2,000 of Tencent Holdings shares you are expected to receive HK$5 in your first year as a dividend.
Dividend Amount
Here we look how much dividend is being paid, if any. Is it above what you can get in a savings account? It is up there with the best dividend paying companies?
  • Tencent Holdings's pays a lower dividend yield than the bottom 25% of dividend payers in Hong Kong (2.19%).
  • Tencent Holdings's dividend is below the markets top 25% of dividend payers in Hong Kong (6.06%).
Annualized Historical and Future Dividends
It is important to see if the dividend for a company is stable, and not wildly increasing/decreasing each year. This graph shows you the historical rate to count toward your assessment of the stock.

We also check to see if the dividend has increased in the past 10 years.
Raw Data
SEHK:700 Annualized Past and Future Dividends
Data Point Source Value
Past Annualized Dividend Yield S&P Global Market Data See Below
Past Dividends per Share Company Filings/ Annualized Dividend Payments See Below
Future Dividends per Share Estimates Average of up to 43 Analyst Estimates (S&P Global) See Below
Asia Interactive Media and Services Industry Average Dividend Yield Market Cap Weighted Average of 15 Stocks 0.3%
Hong Kong Market Average Dividend Yield Market Cap Weighted Average of 977 Stocks 3.6%
Hong Kong Minimum Threshold Dividend Yield 10th Percentile 1.2%
Hong Kong Bottom 25% Dividend Yield 25th Percentile 2.2%
Hong Kong Top 25% Dividend Yield 75th Percentile 6.1%

Industry and Market average data is calculated daily.

Note all dividend per share amounts are annualized and not quarterly or other period.

SEHK:700 Future Dividends Estimate Data
Date (Data in CN¥) Dividend per Share (annual) Avg. No. Analysts
2023-12-31
2022-12-31 1.90 1.00
2021-12-31 1.50 24.00
2020-12-31 1.26 28.00
2019-12-31 1.03 27.00
2019-09-15
SEHK:700 Past Annualized Dividends Data
Date (Data in CN¥) Dividend per share (annual) Avg. Yield (%)
2019-03-21 0.853 0.283
2018-03-21 0.703 0.255
2017-04-10 0.489 0.182
2017-03-22 0.540 0.270
2016-03-30 0.391 0.249
2016-03-17 0.392 0.298
2015-04-15 0.288 0.246
2015-03-30 0.288 0.232
2015-03-18 0.287 0.253
2014-03-31 0.189 0.200
2013-03-28 0.156 0.263
2013-03-20 0.160 0.401
2012-03-14 0.120 0.307
2011-03-16 0.089 0.298
2010-03-17 0.067 0.245
2009-03-18 0.044 0.235

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Tencent Holdings is not paying a notable dividend for Hong Kong, therefore no need to check if the payments are stable.
  • Tencent Holdings is not paying a notable dividend for Hong Kong, therefore no need to check if the payments are increasing.
Current Payout to shareholders
What portion of Tencent Holdings's earnings are paid to the shareholders as a dividend.
  • No need to calculate the sustainability of Tencent Holdings's dividends as it is not paying a notable one for Hong Kong.
Future Payout to shareholders
  • No need to calculate the sustainability of Tencent Holdings's dividends in 3 years as they are not expected to pay a notable one for Hong Kong.
X
Income/ dividend checks
We assess Tencent Holdings's dividend by checking for:
  1. Firstly is the company paying a notable dividend (greater than 1.2%) - if not then the rest of the checks are ignored.
  2. Is current dividend yield above the bottom 25% of dividend payers? (1 check)
  3. Is current dividend yield above the top 25% of dividend payers? (1 check)
  4. Have they paid a dividend for 10 years, and during this period has the dividend been volatile (drop of more than 25%)? (1 check)
  5. If they have paid a dividend for 10 years has it increased in this time? (1 check)
  6. How sustainable is the dividend, can Tencent Holdings afford to pay it from its earnings today and in 3 years (Payout ratio less than 90%)? (2 checks)
  7. Tencent Holdings has a total score of 0/6, see the detailed checks below.


Full details on the Dividends part of the Simply Wall St company analysis model.

700 Management

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

Management is one of the most important areas of a company. We look at unreasonable CEO compensation, how long the team and board of directors have been around for and insider trading.
CEO
Pony Ma
COMPENSATION CN¥114,056,000
AGE 47
CEO Bio

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., Ltd. He is a Venture Partner of ePlanet Capital. Mr. Hauteng is one of the core founders that started the Tencent Group in 1999. He served as the President of Tencent Holdings Limited. Mr Ma has overall responsibilities for strategic planning and positioning and management of the Group. Prior to his current employment, he was in charge of research and development for Internet paging system development at China Motion Telecom Development Limited, a supplier of telecommunications services and products in China. He has more than 24 years of experience in the telecommunications and Internet industries. Mr. Ma is a deputy to the 13th National People’s Congress.He serves as a Director of Ohio River Investment Limited, Tencent Holdings Limited. He is a director of Advance Data Services Limited. Mr. Ma holds a Bachelor of Science (Computer Applications) obtained from Shenzhen University in 1993.

CEO Compensation
  • Pony's compensation has increased by more than 20% in the past year whilst earnings grew less than 20%.
  • Pony's remuneration is higher than average for companies of similar size in Hong Kong.
Management Team Tenure

Average tenure and age of the Tencent Holdings management team in years:

7.3
Average Tenure
47
Average Age
  • The average tenure for the Tencent Holdings management team is over 5 years, this suggests they are a seasoned and experienced team.
Management Team

Pony Ma

TITLE
Co-Founder
COMPENSATION
CN¥114M
AGE
47

Martin Lau

TITLE
President & Executive Director
COMPENSATION
CN¥313M
AGE
46
TENURE
13.6 yrs

Jason Zeng

TITLE
Co-Founder & Advisor Emeritus
AGE
49

Daniel Xu

TITLE
Co-Founder & Chief Information Officer
AGE
48

Tony Zhang

TITLE
Co-Founder & Advisor Emeritus
COMPENSATION
CN¥16M
AGE
47
TENURE
5 yrs

Charles Chen

TITLE
Co-Founder & Advisor Emeritus
AGE
48
TENURE
6.5 yrs

Jeffrey Li

TITLE
Managing Partner
AGE
44

Weibiao Zhan

TITLE
Managing Director
AGE
47

John Lo

TITLE
CFO & Senior VP
AGE
50
TENURE
7.3 yrs

Mark Ren

TITLE
Chief Operating Officer
AGE
43
TENURE
7.3 yrs
Board of Directors Tenure

Average tenure and age of the Tencent Holdings board of directors in years:

14
Average Tenure
63
Average Age
  • The average tenure for the Tencent Holdings board of directors is over 10 years, this suggests they are a seasoned and experienced board.
Board of Directors

Pony Ma

TITLE
Co-Founder
COMPENSATION
CN¥114M
AGE
47

Martin Lau

TITLE
President & Executive Director
COMPENSATION
CN¥313M
AGE
46
TENURE
12.5 yrs

Ian Charles Stone

TITLE
Independent Non-Executive Director
COMPENSATION
CN¥5M
AGE
68
TENURE
15.4 yrs

Charles St. Leger Searle

TITLE
Non-Executive Director
AGE
55
TENURE
18.3 yrs

Silas Yang

TITLE
Independent Non-Executive Director
COMPENSATION
CN¥3M
AGE
64
TENURE
3.2 yrs

Iain Ferguson Bruce

TITLE
Independent Non-Executive Director
COMPENSATION
CN¥5M
AGE
78
TENURE
15.4 yrs

Dong Li

TITLE
Independent Non-Executive Director
COMPENSATION
CN¥3M
AGE
62
TENURE
15.4 yrs

Koos Bekker

TITLE
Non-Executive Director
AGE
66
TENURE
6.8 yrs

Yang Ke

TITLE
Independent Non Executive Director
TENURE
0.1 yrs
Who owns this company?
Recent Insider Trading
  • Tencent Holdings individual insiders have only sold shares in the past 3 months.
Recent Insider Transactions
Announced Type Name Entity Role Start End Shares Max Price (HK$) Value (HK$)
29. Jul 19 Buy JPMorgan Chase & Co, Private Banking and Investment Banking Investments Company 24. Jul 19 24. Jul 19 21,719,346 HK$367.03 HK$7,971,727,598
30. Jul 19 Sell JPMorgan Chase & Co, Brokerage and Securities Investments Company 25. Jul 19 25. Jul 19 -20,924,194 HK$372.05 HK$-7,784,894,454
30. Jul 19 Buy JPMorgan Chase & Co, Brokerage and Securities Investments Company 25. Jul 19 25. Jul 19 174,392 HK$372.05 HK$64,882,944
30. Jul 19 Sell JPMorgan Chase & Co, Private Banking and Investment Banking Investments Company 25. Jul 19 25. Jul 19 -39,328,979 HK$372.05 HK$-14,632,437,000
30. Jul 19 Buy JPMorgan Chase & Co, Private Banking and Investment Banking Investments Company 25. Jul 19 25. Jul 19 2,300 HK$372.05 HK$855,720
30. Jul 19 Buy China International Fund Management Company Limited Company 25. Jul 19 25. Jul 19 5,000 HK$372.05 HK$1,860,261
30. Jul 19 Sell J.P. Morgan Asset Management, Inc. Company 25. Jul 19 25. Jul 19 -106,216 HK$372.05 HK$-39,517,907
30. Jul 19 Buy J.P. Morgan Asset Management, Inc. Company 25. Jul 19 25. Jul 19 52,400 HK$372.05 HK$19,495,540
04. Jul 19 Sell Ian Charles Stone Individual 27. Jun 19 27. Jun 19 -5,000 HK$353.00 HK$-1,765,000
04. Jul 19 Sell Ian Charles Stone Individual 02. Jul 19 02. Jul 19 -5,000 HK$361.00 HK$-1,805,000
03. May 19 Buy JPMorgan Chase & Co, Brokerage and Securities Investments Company 30. Apr 19 30. Apr 19 121,455 HK$387.31 HK$47,040,324
03. May 19 Sell JPMorgan Chase & Co, Private Banking and Investment Banking Investments Company 30. Apr 19 30. Apr 19 -3,272,815 HK$387.31 HK$-1,267,582,866
03. May 19 Buy JPMorgan Chase & Co, Private Banking and Investment Banking Investments Company 30. Apr 19 30. Apr 19 104,600 HK$387.31 HK$40,512,271
03. May 19 Sell Highbridge Capital Management, LLC Company 30. Apr 19 30. Apr 19 -3,206,508 HK$387.31 HK$-1,241,901,727
03. May 19 Sell J.P. Morgan Asset Management, Inc. Company 30. Apr 19 30. Apr 19 -159,798 HK$387.31 HK$-61,890,821
03. May 19 Buy J.P. Morgan Asset Management, Inc. Company 30. Apr 19 30. Apr 19 50 HK$387.31 HK$19,365
03. May 19 Buy J.P. Morgan Asset Management, Inc. Company 29. Apr 19 29. Apr 19 4,798,619 HK$389.78 HK$1,870,421,552
30. Apr 19 Sell JPMorgan Chase & Co, Brokerage and Securities Investments Company 25. Apr 19 25. Apr 19 -186,436 HK$386.55 HK$-72,066,407
30. Apr 19 Sell JPMorgan Chase & Co, Private Banking and Investment Banking Investments Company 25. Apr 19 25. Apr 19 -229,556 HK$386.55 HK$-88,734,344
30. Apr 19 Buy JPMorgan Chase & Co, Private Banking and Investment Banking Investments Company 25. Apr 19 25. Apr 19 340,822 HK$386.55 HK$131,743,960
30. Apr 19 Sell J.P. Morgan Asset Management, Inc. Company 25. Apr 19 25. Apr 19 -29,000 HK$386.55 HK$-11,209,883
30. Apr 19 Buy J.P. Morgan Asset Management, Inc. Company 25. Apr 19 25. Apr 19 100,310 HK$386.55 HK$38,774,600
29. Apr 19 Buy J.P. Morgan Asset Management, Inc. Company 24. Apr 19 24. Apr 19 1,458,724 HK$391.61 HK$571,245,799
04. Apr 19 Sell J.P. Morgan Asset Management, Inc. Company 01. Apr 19 01. Apr 19 -7,165,711 HK$366.20 HK$-2,624,081,917
19. Mar 19 Buy J.P. Morgan Asset Management, Inc. Company 14. Mar 19 14. Mar 19 567,948 HK$358.06 HK$203,361,448
23. Jan 19 Sell Ian Charles Stone Individual 18. Jan 19 18. Jan 19 -55,000 HK$335.05 HK$-18,427,876
27. Nov 18 Sell Iain Ferguson Bruce Individual 22. Nov 18 22. Nov 18 -20,500 HK$292.40 HK$-5,994,200
27. Nov 18 Sell Iain Ferguson Bruce Individual 26. Nov 18 26. Nov 18 -10,000 HK$295.85 HK$-2,958,500
X
Management checks
We assess Tencent Holdings's management by checking for:
  1. Is the CEO's compensation unreasonable compared to market cap? (1 check)
  2. Has the CEO's compensation increased more than 20% whilst the EPS is down more then 20%? (1 check)
  3. Is the average tenure of the management team less than 2 years? (1 check)
  4. Is the average tenure of the board of directors team less than 3 years? (1 check)
  5. Tencent Holdings has a total score of 0/6, this is not included on the snowflake, see the detailed checks below.


Note: We use the top 6 management executives and board members in our calculations.

Note 2: Insider trading include any internal stakeholders and these transactions .

Full details on the Management part of the Simply Wall St company analysis model.

700 News

Simply Wall St News

Have Insiders Been Selling Tencent Holdings Limited (HKG:700) Shares?

So shareholders might well want to know whether insiders have been buying or selling shares in Tencent Holdings Limited (HKG:700). … As Peter Lynch said, 'insiders might sell their shares for any number of reasons, but they buy them for only one: they think the price will rise.' View our latest analysis for Tencent Holdings Tencent Holdings Insider Transactions Over The Last Year In the last twelve months, the biggest single sale by an insider was when the Independent Non-Executive Director, Ian Charles Stone, sold HK$18m worth of shares at a price of HK$335 per share. … Insider Ownership of Tencent Holdings Many investors like to check how much of a company is owned by insiders.

Simply Wall St -

Could Tencent Holdings Limited's (HKG:700) Investor Composition Influence The Stock Price?

Check out our latest analysis for Tencent Holdings SEHK:700 Ownership Summary, August 22nd 2019 What Does The Institutional Ownership Tell Us About Tencent Holdings? … We can see that Tencent Holdings does have institutional investors; and they hold 23% of the stock. … Public Company Ownership Public companies currently own 31% of 700 stock.

Simply Wall St -

Introducing Tencent Holdings (HKG:700), The Stock That Zoomed 153% In The Last Five Years

For example, the Tencent Holdings Limited (HKG:700) share price has soared 153% in the last half decade. … We note that the broader market is down 10% in the last month, and this may have impacted Tencent Holdings's share price. … During five years of share price growth, Tencent Holdings achieved compound earnings per share (EPS) growth of 34% per year.

Simply Wall St -

Boasting A 21% Return On Equity, Is Tencent Holdings Limited (HKG:700) A Top Quality Stock?

Our data shows Tencent Holdings has a return on equity of 21% for the last year. … The formula for ROE is: Return on Equity = Net Profit ÷ Shareholders' Equity Or for Tencent Holdings: 21% = CN¥83b ÷ CN¥398b (Based on the trailing twelve months to March 2019.) Most readers would understand what net profit is, but it’s worth explaining the concept of shareholders’ equity. … Combining Tencent Holdings's Debt And Its 21% Return On Equity Although Tencent Holdings does use debt, its debt to equity ratio of 0.46 is still low.

Simply Wall St -

Is Tencent Holdings Limited (HKG:700) Better Than Average At Deploying Capital?

The formula for calculating the return on capital employed is: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) Or for Tencent Holdings: 0.15 = CN¥84b ÷ (CN¥781b - CN¥217b) (Based on the trailing twelve months to March 2019.) So, Tencent Holdings has an ROCE of 15%. … Check out our latest analysis for Tencent Holdings Is Tencent Holdings's ROCE Good? … Tencent Holdings's Current Liabilities And Their Impact On Its ROCE Current liabilities include invoices, such as supplier payments, short-term debt, or a tax bill, that need to be paid within 12 months.

Simply Wall St -

Is Tencent Holdings (HKG:700) Using Too Much Debt?

See our latest analysis for Tencent Holdings What Is Tencent Holdings's Net Debt? … During the last three years, Tencent Holdings generated free cash flow amounting to a very robust 84% of its EBIT, more than we'd expect. … And that's just the beginning of the good news since its conversion of EBIT to free cash flow is also very heartening.

Simply Wall St -

Does Tencent Holdings Limited's (HKG:700) CEO Salary Compare Well With Others?

At the time of writing our data says that Tencent Holdings Limited has a market cap of HK$3.4t, and is paying total annual CEO compensation of CN¥41m. … I think that the total shareholder return of 96%, over three years, would leave most Tencent Holdings Limited shareholders smiling. … We compared the total CEO remuneration paid by Tencent Holdings Limited, and compared it to remuneration at a group of other large companies.

Simply Wall St -

How Do Analysts See Tencent Holdings Limited (HKG:700) Performing In The Year Ahead?

Since Tencent Holdings Limited (HKG:700) released its earnings in March 2019, analysts seem cautiously bearish, with earnings expected to grow by 19% in the upcoming year compared with the higher past 5-year average growth rate of 32%. … See our latest analysis for Tencent Holdings What can we expect from Tencent Holdings in the longer term? … SEHK:700 Past and Future Earnings, July 8th 2019 This results in an annual growth rate of 18% based on the most recent earnings level of CN¥79b to the final forecast of CN¥139b by 2022.

Simply Wall St -

Is Tencent Holdings Limited (HKG:700) Undervalued After Accounting For Its Future Growth?

Tencent Holdings Limited (HKG:700) is considered a high-growth stock, but its last closing price of HK$355.8 left some investors wondering if this high future earnings potential can be rationalized by its current price tag. … This tells us that Tencent Holdings is overvalued compared to the HK market average ratio of 10.8x , and overvalued based on current earnings compared to the Interactive Media and Services industry average of 12.06x. … Based on this growth, Tencent Holdings's stock can be considered a bit overvalued , based on fundamental analysis.

Simply Wall St -

Want To Invest In Tencent Holdings Limited (HKG:700)? Here's How It Performed Lately

In this commentary, I will examine Tencent Holdings Limited's (HKG:700) latest earnings update (31 March 2019) and compare these figures against its performance over the past couple of years, as well as how the rest of the interactive media and services industry performed. … However, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 32%, indicating the rate at which 700 is growing has slowed down. … You should continue to research Tencent Holdings to get a more holistic view of the stock by looking at: Future Outlook: What are well-informed industry analysts predicting for 700’s future growth?

Simply Wall St -

700 Company Info

Description

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. The company operates through VAS, Online Advertising, and Others segments. It offers online games and social networks across various online platforms; online advertising services, such as media, social, and display-based advertising services; and FinTech, cloud, television series and film production, and other services for individual and corporate users. The company also develops software; develops and operates online games; and provides information technology, information system integration, asset management, online literature, and online music entertainment services. Tencent Holdings Limited has a strategic partnership with Roblox Corporation; and a collaboration agreement with The Pokémon Company. The company was founded in 1998 and is headquartered in Shenzhen, the People’s Republic of China.

Details
Name: Tencent Holdings Limited
700
Exchange: SEHK
Founded: 1998
HK$3,321,027,263,339
9,499,505,902
Website: http://www.tencent.com
Address: Tencent Holdings Limited
Tencent Binhai Towers,
No. 33 Haitian 2nd Road,
Shenzhen,
Guangdong Province, 518054,
China
Listings
Exchange Symbol Ticker Symbol Security Exchange Country Currency Listed on
SEHK 700 Ordinary Shares The Stock Exchange of Hong Kong Ltd. HK HKD 16. Jun 2004
OTCPK TCTZ.F Ordinary Shares Pink Sheets LLC US USD 16. Jun 2004
DB NNND Ordinary Shares Deutsche Boerse AG DE EUR 16. Jun 2004
LSE 0Z4S Ordinary Shares London Stock Exchange GB HKD 16. Jun 2004
SHSC 700 Ordinary Shares Stock Exchange of Hong Kong Limited - Shanghai - Hong Kong Stock Connect HK HKD 16. Jun 2004
SZSC 700 Ordinary Shares The Stock Exchange of Hong Kong - Shenzhen - Hong Kong Stock Connect HK HKD 16. Jun 2004
WBAG NNND Ordinary Shares Wiener Boerse AG AT EUR 16. Jun 2004
OTCPK TCEH.Y ADR EACH REP 1 ORD UNSPON Pink Sheets LLC US USD 22. Oct 2008
DB NNN1 ADR EACH REP 1 ORD UNSPON Deutsche Boerse AG DE EUR 22. Oct 2008
LSE 0LEA ADR EACH REP 1 ORD UNSPON London Stock Exchange GB USD 22. Oct 2008
WBAG NNN1 ADR EACH REP 1 ORD UNSPON Wiener Boerse AG AT EUR 22. Oct 2008
BMV TCEHY N ADR EACH REP 1 ORD UNSPON Bolsa Mexicana de Valores MX MXN 22. Oct 2008
Number of employees
Current staff
Staff numbers
56,310
Tencent Holdings employees.
Industry
Interactive Media and Services
Media
Company Analysis and Financial Data Status
Area Date (UTC time)
Company Analysis updated: 2019/09/15 12:40
End of day share price update: 2019/09/13 00:00
Last estimates confirmation: 2019/09/13
Last earnings filing: 2019/08/26
Last earnings reported: 2019/06/30
Last annual earnings reported: 2018/12/31


All dates and times in UTC. All financial data provided by Standard & Poor’s Capital IQ.

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.