Tencent Holdings (0700) AI Stock Analysis

• Market Cap: $4.67T
• Dividend Yield: 0.88%
• Average Volume (3M): 18.46M
• Price to Earnings (P/E): 22.0
• Beta (1Y): 1.19
• Revenue Growth: 8.88%
• EPS Growth: 54.27%
• Country: HK
• Employees: 110,558
• Sector: Communication Services
• Sector Strength: 91
• Industry: Internet Content & Information
• EPS (TTM): 7.17
• Shares Outstanding: 9,190,132,000
• 10 Day Avg. Volume: 17,840,582
• 30 Day Avg. Volume: 18,458,399
• PEG Ratio: 1.30
• Price to Book (P/B): 4.03
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 21.47
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $645.26
• Price Target Upside: 25.29% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 14

• Rating: 78 Outperform
• Price Target: HK$595.00 ▲(15.53%Upside)

Tencent Holdings demonstrates robust financial performance with strong revenue and profit growth, supported by effective cash management. Technical indicators show positive momentum, albeit with potential overbought conditions. Valuation is fair, though regulatory challenges remain a concern. The earnings call underscores significant growth in AI and gaming, but highlights potential risks from regulatory uncertainties and fintech challenges. Overall, the stock is well-positioned for growth, but requires careful navigation of external pressures.

Positive Factors

AI Development

Tencent's AI cloud revenue doubled year-over-year, with total capital expenditure increasing significantly to support AI development.

Games Revenue

Tencent's games business maintains strong momentum with a 24% YoY revenue increase, driven by new games and record-high gross receipts from evergreen games.

Shareholder Returns

Tencent plans to increase annual dividend by 32% and repurchase at least HK$80bn shares, signaling strong shareholder returns.

Negative Factors

Cloud Growth

Cloud growth was slow due to prioritizing GPU for internal use, which may affect short-term revenue growth.

Margin Expansion

Increased AI investment is expected to weigh on Tencent's margin expansion, slowing down the pace of growth.

Regulatory Risks

Potential risks include regulatory tightening on the game approval process and anti-trust-related market practices.

Tencent Holdings Business Overview & Revenue Model

Company Description

Tencent Holdings Limited, founded in 1998 and headquartered in Shenzhen, China, is a multinational conglomerate holding company with a diverse portfolio in various sectors, including social networking, gaming, digital content, advertising, and fintech. It is best known for its popular social media platforms such as WeChat and QQ, as well as its extensive gaming division, which includes titles like Honor of Kings and PUBG Mobile. Tencent also invests in a wide range of technology and media companies globally, positioning itself as a leader in the digital innovation space.

How the Company Makes Money

Tencent generates revenue through multiple streams. The primary source of income is its gaming division, where it earns from in-game purchases, subscriptions, and royalties from both its own games and those of companies in which it holds stakes. Social networks like WeChat and QQ contribute to revenue through advertising services and value-added services, including digital content subscriptions and virtual goods sales. Additionally, Tencent's fintech services, under the brand WeChat Pay, provide revenue through transaction fees and financial services. The company also invests in other tech and media companies, gaining profits through dividends and capital gains. Strategic partnerships and ventures further enhance its earnings potential by tapping into new markets and technologies.

Tencent Holdings Financial Statement Overview

Summary

Income Statement

Balance Sheet

Cash Flow

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
660.26B	609.01B	554.55B	560.12B	482.06B
	Gross Profit
349.25B	293.11B	238.75B	245.94B	221.53B
	EBIT
208.10B	160.07B	87.92B	108.58B	133.41B
	EBITDA
231.96B	183.94B	134.30B	313.65B	238.25B
	Net Income Common Stockholders
194.07B	115.22B	188.24B	224.82B	159.85B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
343.16B	379.15B	289.48B	262.35B	227.88B
	Total Assets
1.78T	1.58T	1.58T	1.61T	1.33T
	Total Debt
358.11B	371.24B	359.14B	323.48B	262.46B
	Net Debt
225.59B	198.92B	202.40B	155.51B	109.67B
	Total Liabilities
727.10B	703.57B	795.27B	735.67B	555.38B
	Stockholders Equity
973.55B	808.59B	721.39B	806.30B	703.98B
Cash Flow		Free Cash Flow
181.76B	174.56B	95.24B	113.02B	127.52B
	Operating Cash Flow
258.52B	221.96B	146.09B	175.19B	194.12B
	Investing Cash Flow
-122.19B	-125.16B	-104.87B	-178.55B	-181.96B
	Financing Cash Flow
-176.49B	-82.57B	-59.95B	21.62B	13.65B

Tencent Holdings Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 515.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:0700, the sentiment is Positive. The current price of 515 is above the 20-day moving average (MA) of 511.14, above the 50-day MA of 488.81, and above the 200-day MA of 436.06, indicating a bullish trend. The MACD of 5.92 indicates Positive momentum. The RSI at 58.20 is Neutral, neither overbought nor oversold. The STOCH value of 84.86 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:0700.

Tencent Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1024	80 Outperform	HK$234.50B	15.48	25.82%	―	9.42%	33.34%
0700	78 Outperform	$4.67T	21.96	21.25%	0.88%	8.88%	54.27%
9888	75 Outperform	HK$234.48B	8.51	9.84%	―	-1.73%	32.35%
9898	72 Outperform	HK$18.33B	7.12	10.79%	8.44%	0.43%	21.65%
1896	67 Neutral	HK$8.60B	43.43	2.01%	―	-15.71%	-80.38%
Sector *	61 Neutral	$14.37B	5.86	-4.31%	3.69%	2.75%	-35.55%
0772	61 Neutral	$30.30B	27.55	-1.14%	―	13.74%	-125.64%

Tencent Holdings Corporate Events

Tencent Holdings Approves Key Resolutions at 2025 AGM

Tencent Holdings Limited held its 2025 Annual General Meeting on May 14, where all proposed resolutions were approved by shareholders. Key resolutions included the approval of financial statements, the declaration of a final dividend, the re-election of directors, and the granting of mandates to issue and repurchase shares. The approval of these resolutions reflects shareholder confidence in the company’s strategic direction and governance, potentially impacting its market operations and shareholder value positively.

The most recent analyst rating on (HK:0700) stock is a Buy with a HK$450.00 price target. To see the full list of analyst forecasts on Tencent Holdings stock, see the HK:0700 Stock Forecast page.

Tencent Reports Robust Q1 2025 Results with AI-Driven Growth

Tencent Holdings reported strong financial results for the first quarter of 2025, with significant year-on-year growth in revenues and profits. The company highlighted its strategic investments in AI technologies, which have already started contributing to its business operations, particularly in performance advertising and gaming. Tencent’s initiatives, such as integrating AI features into Weixin, aim to enhance user experience and productivity, while its focus on AI-driven innovations is expected to generate long-term value for stakeholders.

The most recent analyst rating on (HK:0700) stock is a Buy with a HK$450.00 price target. To see the full list of analyst forecasts on Tencent Holdings stock, see the HK:0700 Stock Forecast page.

Tencent Announces 2025 Annual General Meeting Agenda

Tencent Holdings Limited has announced its upcoming Annual General Meeting (AGM) scheduled for May 14, 2025, in Hong Kong. The meeting will address several key issues, including the consideration of audited financial statements, the declaration of a final dividend, the re-election of directors, and the re-appointment of auditors. Additionally, shareholders will vote on granting a general mandate to the company’s directors to allot and issue shares, which could impact the company’s strategic flexibility and capital structure.

Tencent Announces Upcoming Board Meeting for Q1 Results

Tencent Holdings Limited has announced that its board of directors will meet on May 14, 2025, to approve the unaudited first quarter results for the period ending March 31, 2025, and to consider the payment of a dividend. This meeting is significant as it will provide insights into the company’s financial performance and potential shareholder returns, impacting its market positioning and stakeholder interests.

Tencent Grants Over 6 Million Share Options to Employees

Tencent Holdings Limited has announced the grant of 6,663,390 share options to its employees under the company’s Share Option Scheme. This move is aimed at retaining and incentivizing employees, including senior management, by offering them the opportunity to subscribe for shares at an exercise price of HK$526.9 per share. The options have a vesting period ranging from approximately 22 to 48 months and are intended to encourage long-term commitment and contribution to the company’s growth.

Tencent Grants Over 16 Million Shares to Employees Under Award Scheme

Tencent Holdings Limited announced the grant of 16,889,865 awarded shares to employee participants under its Share Award Scheme, representing approximately 0.1836% of the total shares in issue as of the announcement date. This move is part of Tencent’s strategy to retain and incentivize its employees, including senior management, by offering a vesting period ranging from 14 to 60 months, thus encouraging continuous contribution to the company’s long-term success and growth.

Tencent Declares Final Dividend for 2024

Tencent Holdings Limited announced a final cash dividend of HKD 4.5 per share for the financial year ending December 31, 2024. The dividend will be paid on May 30, 2025, following shareholder approval on May 14, 2025. This announcement reflects Tencent’s continued commitment to delivering value to its shareholders, potentially strengthening its market position and investor confidence.

Tencent Reports Strong Financial Growth in 2024

Tencent Holdings Limited announced its audited consolidated results for the year ending December 31, 2024, showcasing a robust financial performance. The company reported an 8% increase in revenues to RMB 660,257 million and a 30% rise in operating profit to RMB 208,099 million, reflecting strong growth in its core business areas. The profit attributable to equity holders surged by 68% to RMB 194,073 million, indicating a significant improvement in profitability. This strong financial performance underscores Tencent’s strategic positioning in the technology sector and its ability to capitalize on market opportunities, which may positively impact its stakeholders and enhance its competitive edge.