Tencent Holdings Limited (TCEHY)
OTHER OTC:TCEHY
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Tencent Holdings
(OTC:TCEHY)
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Rating:68Neutral
Price Target:
$72.00
▲(10.43% Upside)
Action:DowngradedDate:04/18/26
The score is driven primarily by strong financial performance (high and improving profitability, steady recent revenue growth, and manageable leverage), partially offset by only moderate cash conversion. Technical signals are the main drag, with the stock trading below key longer-term moving averages and a negative MACD. Valuation is neutral-to-slightly supportive with a mid-range P/E and modest dividend yield.
Positive Factors
High Net Margins
Sustained net margins near 29–30% reflect durable monetization and disciplined cost structure across Tencent’s core businesses. High margins provide long-term internal funding for R&D, content, and investments, supporting competitive positioning and resilience through slower revenue periods.
Negative Factors
Moderate FCF Conversion
Free cash flow conversion around 63% means significant portions of reported earnings do not convert immediately to discretionary cash. This limits the pace of capital returns and makes funding large strategic initiatives more dependent on operating improvement or asset sales.
Read all positive and negative factors
Positive Factors
Negative Factors
High Net Margins
Sustained net margins near 29–30% reflect durable monetization and disciplined cost structure across Tencent’s core businesses. High margins provide long-term internal funding for R&D, content, and investments, supporting competitive positioning and resilience through slower revenue periods.
Read all positive factors
Tencent Holdings (TCEHY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$569.43B
Dividend Yield0.74%
Average Volume (3M)571.77K
Price to Earnings (P/E)22.2
Beta (1Y)0.37
Revenue Growth14.01%
EPS Growth18.38%
CountryUS
Employees110,558
SectorCommunication Services
Sector Strength97
IndustryInternet Content & Information
Share Statistics
EPS (TTM)1.01
Shares Outstanding9,125,598,000
10 Day Avg. Volume628,232
30 Day Avg. Volume571,768
Financial Highlights & Ratios
PEG Ratio1.50
Price to Book (P/B)4.21
Price to Sales (P/S)6.65
P/FCF Ratio25.57
Enterprise Value/Market Cap7.28
Enterprise Value/Revenue5.89
Enterprise Value/Gross Profit10.77
Enterprise Value/Ebitda15.90
Forecast
1Y Price Target
$102.00Price Target Upside56.44% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
EPS Forecast (FY)4.38
Revenue Forecast (FY)$121.15B
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...
How the Company Makes Money
Tencent generates revenue primarily from a mix of value-added services, online advertising, and fintech and business services. (1) Value-Added Services (VAS): A major portion comes from domestic and international online games (in-game purchases, b...
Tencent Holdings Key Performance Indicators (KPIs)
Any
Total Video Subscribers
Indicates the number of users subscribed to Tencent's video services, reflecting the platform's reach and potential for ad and subscription revenue.
Indicates the number of users subscribed to Tencent's video services, reflecting the platform's reach and potential for ad and subscription revenue.
Data provided by:
The Fly
The FlyTencent Holdings Earnings Call Summary
Earnings Call Date:Nov 13, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:May 20, 2026
Earnings Call Sentiment Positive
The earnings call reflects a strong financial performance with notable growth in revenue and profits, particularly in the games and fintech segments. AI advancements and marketing services also contributed positively. However, challenges such as decreased video subscriptions and high R&D expenses were noted.Positive Updates
Strong Financial Performance
Total revenue reached RMB 193 billion, up 15% year-on-year. Gross profit was RMB 109 billion, up 22% year-on-year. Non-IFRS operating profit was RMB 73 billion, up 18% year-on-year.
Negative Updates
Challenges in Long-form Video Subscriptions
Long-form video subscription revenue decreased 3% year-on-year, with a 2% decline in video subscribers due to delayed content releases.
Read all updates
Q3-2025 Updates
Positive
Negative
Strong Financial Performance
Total revenue reached RMB 193 billion, up 15% year-on-year. Gross profit was RMB 109 billion, up 22% year-on-year. Non-IFRS operating profit was RMB 73 billion, up 18% year-on-year.
Read all positive updates
Company Guidance
During the third quarter of 2025, Tencent Holdings Limited reported significant financial gains, with total revenue reaching RMB 193 billion, marking a 15% year-on-year increase. The company's gross profit rose to RMB 109 billion, up 22% year-on-year, and the non-IFRS operating profit and net profit attributable to equity holders both increased by 18% year-on-year to RMB 73 billion and RMB 71 billion, respectively. Key growth areas included games, marketing services, and fintech and business services. In particular, the domestic games segment generated RMB 96 billion in revenue, up 16% year-on-year, with notable performances from games like Delta Force and VALORANT. The international games segment experienced a remarkable 43% year-on-year revenue increase, driven by factors such as upfront revenue recognition from Dying Light: The Beast and studio acquisitions. Tencent's strategic investment in AI, particularly in ad targeting and game engagement, contributed to these results, while improvements in the Hunyuan foundation model further bolstered its technological capabilities. The company also reported a non-IFRS diluted EPS rise of 19% year-on-year to RMB 7.575, despite a slight increase in R&D expenses by 28% year-on-year, reflecting investment in AI initiatives.Tencent Holdings Financial Statement Overview
Summary
Income Statement
84
Very Positive
Balance Sheet
79
Positive
Cash Flow
74
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 704.16B | 731.28B | 660.26B | 609.01B | 554.55B | 560.12B |
| Gross Profit | 385.04B | 411.08B | 349.30B | 293.11B | 238.75B | 245.94B |
| EBITDA | 260.86B | 302.12B | 230.09B | 183.94B | 134.30B | 313.65B |
| Net Income | 208.00B | 218.72B | 194.07B | 115.22B | 188.24B | 224.82B |
Balance Sheet | ||||||
| Total Assets | 2.01T | 2.04T | 1.78T | 1.58T | 1.58T | 1.61T |
| Cash, Cash Equivalents and Short-Term Investments | 380.44B | 434.01B | 343.16B | 379.15B | 289.48B | 262.35B |
| Total Debt | 412.49B | 406.66B | 358.11B | 371.24B | 359.14B | 323.48B |
| Total Liabilities | 810.46B | 798.43B | 727.10B | 703.57B | 795.27B | 735.67B |
| Stockholders Equity | 1.11T | 1.15T | 973.55B | 808.59B | 721.39B | 806.30B |
Cash Flow | ||||||
| Free Cash Flow | 187.40B | 190.17B | 162.47B | 174.56B | 95.24B | 113.02B |
| Operating Cash Flow | 283.33B | 303.05B | 258.52B | 221.96B | 146.09B | 175.19B |
| Investing Cash Flow | -149.15B | -205.73B | -122.19B | -125.16B | -104.87B | -178.55B |
| Financing Cash Flow | -106.82B | -87.16B | -176.49B | -82.57B | -59.95B | 21.62B |
Tencent Holdings Technical Analysis
Neutral
65.20
Price Trends
66.40
Negative
72.32
Negative
74.81
Negative
Market Momentum
-0.74
Negative
50.57
Neutral
75.74
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TCEHY, the sentiment is Neutral. The current price of 65.2 is above the 20-day moving average (MA) of 63.68, below the 50-day MA of 66.40, and below the 200-day MA of 74.81, indicating a neutral trend. The MACD of -0.74 indicates Negative momentum. The RSI at 50.57 is Neutral, neither overbought nor oversold. The STOCH value of 75.74 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TCEHY.
Tencent Holdings Peers Comparison
UnderperformOutperform
Sector (60)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $13.48B | 24.71 | 13.77% | 1.02% | 16.03% | 69.80% | |
68 Neutral | $569.43B | 22.23 | 19.90% | 0.74% | 14.01% | 18.38% | |
60 Neutral | $48.67B | 4.58 | -11.27% | 4.14% | 2.83% | -41.78% | |
60 Neutral | $2.94B | 15.37 | 31.92% | 4.25% | -4.86% | ― | |
60 Neutral | $2.06B | 5.42 | 12.13% | 8.13% | 0.36% | 48.25% | |
46 Neutral | $42.83B | 62.07 | 1.73% | ― | -2.93% | -81.11% |
* Communication Services Sector Average
TCEHY
Tencent Holdings
62.98
1.81
2.96%
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JOYY
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8.41
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TME
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9.34
-3.76
-28.70%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.