Tencent Holdings (0700) AI Stock Analysis

• Market Cap: $5.52T
• Dividend Yield: 0.72%
• Average Volume (3M): 17.35M
• Price to Earnings (P/E): 24.8
• Beta (1Y): 1.21
• Revenue Growth: 11.41%
• EPS Growth: 39.10%
• Country: HK
• Employees: 110,558
• Sector: Communication Services
• Sector Strength: 97
• Industry: Internet Content & Information
• EPS (TTM): 7.42
• Shares Outstanding: 9,153,673,000
• 10 Day Avg. Volume: 16,885,946
• 30 Day Avg. Volume: 17,348,439
• PEG Ratio: 0.26
• Price to Book (P/B): 3.73
• Price to Sales (P/S): 5.50
• P/FCF Ratio: 19.97
• Enterprise Value/Market Cap: 0.87
• Enterprise Value/Revenue: 6.79
• Enterprise Value/Gross Profit: 12.42
• Enterprise Value/Ebitda: 18.68
• 1Y Price Target: $727.85
• Price Target Upside: 15.72% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 30

• Rating: 79 Outperform
• Price Target: HK$736.00 ▲(17.01% Upside)

Tencent Holdings receives a strong overall score of 79, driven primarily by its robust financial performance and positive earnings call. The technical analysis supports a bullish outlook, although the valuation suggests the stock is priced for growth. The earnings call underscored strategic advancements, particularly in AI, which bolster long-term growth prospects. Monitoring cash flow trends and valuation metrics will be crucial as the company continues to invest in growth initiatives.

Positive Factors

Negative Factors

Tencent Holdings Business Overview & Revenue Model

Company Description

Tencent Holdings Limited, an investment holding company, provides value-added services (VAS) and Online advertising services in Mainland China and internationally. The company operates through VAS, Online Advertising, FinTech and Business Services, and Others segments. It offers online games and social network services; FinTech and cloud services, and online advertising services. The company is also involved in the production, investment, and distribution of films and television programs for third parties, as well as copyrights licensing, merchandise sales, and other activities. n addition, it 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 company was founded in 1998 and is headquartered in Shenzhen, the People's Republic of China.

How the Company Makes Money

Tencent generates revenue through several key streams. The largest portion comes from its online gaming segment, which includes both self-developed games and distribution of games developed by third parties. Social networks, primarily driven by WeChat and QQ, contribute significantly through subscription services, advertising, and virtual goods sales. Tencent also monetizes its fintech services by providing payment solutions, wealth management, and other financial services. Cloud services, which have seen substantial growth, offer infrastructure and services to businesses across various industries. Strategic partnerships, investments, and acquisitions in the tech and gaming sectors further enhance its revenue potential. Overall, Tencent's diversified business model allows it to capitalize on various consumer and enterprise demands in the digital economy.

Tencent Holdings Financial Statement Overview

Summary

Tencent Holdings demonstrates strong financial performance with robust profitability and a solid balance sheet. The income statement reflects consistent revenue and profit growth, while the balance sheet shows a healthy capital structure with manageable debt levels. Although the cash flow statement indicates some pressure on free cash flow growth, the company maintains a stable cash flow position. Overall, Tencent is well-positioned financially, but monitoring cash flow trends will be important moving forward.

Income Statement

Tencent Holdings shows strong profitability with a TTM gross profit margin of 54.67% and a net profit margin of 29.54%. The revenue growth rate of 3.44% in the TTM indicates steady growth, although it has slowed compared to previous years. The EBIT margin of 33.70% and EBITDA margin of 36.35% reflect efficient operations. Overall, the income statement demonstrates robust financial health with consistent revenue and profit growth.

Balance Sheet

The company's balance sheet is solid with a debt-to-equity ratio of 0.37, indicating a manageable level of debt. The return on equity (ROE) is strong at 20.59%, showcasing effective use of equity to generate profits. The equity ratio stands at 55.39%, reflecting a healthy capital structure. While the balance sheet is stable, the slight increase in debt levels over the years warrants monitoring.

Cash Flow

Tencent's cash flow statement reveals a slight decline in free cash flow growth at -2.77% in the TTM, which could be a concern if the trend continues. However, the operating cash flow to net income ratio of 0.60 and free cash flow to net income ratio of 0.68 indicate that the company generates sufficient cash from operations to cover its net income. Overall, the cash flow position is stable but shows signs of pressure.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	704.16B	660.26B	609.01B	554.55B	560.12B	482.06B
Gross Profit	384.99B	349.25B	293.11B	238.75B	245.94B	221.53B
EBITDA	256.00B	310.14B	183.94B	134.30B	313.65B	238.25B
Net Income	208.00B	194.07B	115.22B	188.24B	224.82B	159.85B
Balance Sheet
Total Assets	2.01T	1.79T	1.58T	1.56T	1.61T	1.33T
Cash, Cash Equivalents and Short-Term Investments	380.44B	341.57B	375.91B	288.13B	264.35B	229.83B
Total Debt	412.49B	357.94B	370.14B	354.07B	322.89B	261.82B
Total Liabilities	810.46B	733.37B	708.09B	788.90B	735.46B	555.50B
Stockholders Equity	1.11T	973.07B	806.20B	711.20B	804.85B	702.25B
Cash Flow
Free Cash Flow	173.56B	181.76B	174.56B	95.24B	113.02B	127.52B
Operating Cash Flow	283.33B	258.52B	221.96B	146.09B	175.19B	194.12B
Investing Cash Flow	-149.15B	-122.19B	-125.16B	-104.87B	-178.55B	-181.96B
Financing Cash Flow	-106.82B	-176.49B	-82.57B	-59.95B	21.62B	13.65B

Tencent Holdings Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 629.00
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:0700, the sentiment is Neutral. The current price of 629 is below the 20-day moving average (MA) of 643.88, below the 50-day MA of 632.08, and above the 200-day MA of 526.49, indicating a neutral trend. The MACD of 1.12 indicates Positive momentum. The RSI at 46.79 is Neutral, neither overbought nor oversold. The STOCH value of 61.54 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for HK:0700.

Tencent Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
0700	―	$5.52T	24.79	21.04%	0.72%	11.41%	39.10%
1024	―	HK$315.90B	17.93	25.22%	―	10.72%	17.05%
9888	―	HK$323.97B	11.11	10.28%	―	-1.69%	42.04%
9898	―	HK$21.85B	8.14	10.70%	7.59%	0.99%	14.41%
0772	―	$39.98B	277.20	0.67%	―	-10.26%	-85.75%
Sector *	―	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
1896	―	HK$7.96B	97.03	0.82%	4.82%	-7.61%	-90.51%

Tencent Holdings Corporate Events

Tencent Completes CNY9 Billion Note Issuance Under Global Programme

Tencent Holdings Limited has successfully completed the issuance of CNY9 billion in notes under its Global Medium Term Note Programme as of September 23, 2025. This issuance, which includes notes maturing in 2030, 2035, and 2055, is part of Tencent’s strategic financial management, potentially enhancing its liquidity position and supporting its long-term growth initiatives.

The most recent analyst rating on (HK:0700) stock is a Buy with a HK$736.00 price target. To see the full list of analyst forecasts on Tencent Holdings stock, see the HK:0700 Stock Forecast page.

Tencent Holdings to Review Q3 Results and Dividend Prospects

Tencent Holdings Limited has announced that its Board of Directors will convene on November 13, 2025, to approve the company’s unaudited third quarter results and potentially declare a dividend. This meeting is significant as it will provide insights into Tencent’s financial performance for the three and nine months ending September 30, 2025, which could impact its market positioning and stakeholder interests.

The most recent analyst rating on (HK:0700) stock is a Buy with a HK$754.00 price target. To see the full list of analyst forecasts on Tencent Holdings stock, see the HK:0700 Stock Forecast page.

Tencent Holdings Prices CNY9 Billion Notes for Corporate Expansion

Tencent Holdings has announced the pricing of CNY9 billion notes under its Global Medium Term Note Programme, with the proceeds intended for general corporate purposes. The notes, expected to be issued on 23 September 2025, will not be registered under the U.S. Securities Act and will be offered in offshore transactions to non-U.S. persons, highlighting Tencent’s strategic financial management and its focus on expanding its capital market activities.

The most recent analyst rating on (HK:0700) stock is a Buy with a HK$735.00 price target. To see the full list of analyst forecasts on Tencent Holdings stock, see the HK:0700 Stock Forecast page.

Tencent Updates Global Medium Term Note Programme and Plans International Note Issuance

Tencent Holdings has updated its Global Medium Term Note Programme to include recent corporate and financial information, and plans to issue notes to professional investors internationally. The issuance, dependent on market conditions and investor interest, aims to strengthen Tencent’s financial position, with J.P. Morgan, BofA Securities, and Morgan Stanley appointed as arrangers.

The most recent analyst rating on (HK:0700) stock is a Buy with a HK$594.00 price target. To see the full list of analyst forecasts on Tencent Holdings stock, see the HK:0700 Stock Forecast page.

Tencent Grants Share Awards to Boost Employee Retention

Tencent Holdings announced the grant of 23,935,991 Awarded Shares to Employee Participants under its Share Award Scheme, representing approximately 0.261% of the total shares in issue. The awards, which do not require shareholder approval, are intended to incentivize and retain employees, with a vesting period ranging from 12 to 48 months. This move is aimed at encouraging continuous contribution to the company’s operations and long-term growth, reflecting Tencent’s commitment to rewarding its workforce and strengthening its market position.

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 Grants Share Options to Boost Employee Engagement

Tencent Holdings announced the grant of 597,357 share options to employee participants under its Share Option Scheme, with an exercise price of HKD590 per share. This initiative aims to retain and incentivize employees, encouraging their contribution to the company’s long-term growth and success, without exceeding the 1% individual limit of shares in issue.

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 Holdings Reports Strong Q2 2025 Growth

Tencent Holdings, a leading Chinese multinational conglomerate, operates primarily in the technology and entertainment sectors, offering services such as social networking, gaming, and financial technology.

Tencent Reports Strong Growth in Q2 2025 Financial Results

Tencent Holdings announced its unaudited consolidated financial results for the three and six months ending June 30, 2025, showcasing robust growth. The company reported a year-on-year revenue increase of 15% for the second quarter and 14% for the first half of the year, driven by strong performances across its core business segments. Gross profit and operating profit also saw significant increases, indicating improved operational efficiency and market positioning. The results reflect Tencent’s continued strength in its digital ecosystem, benefiting stakeholders with increased earnings per share and profitability.

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.