Education
About Us
Working with TipRanks
Follow Us
Tencent Holdings Limited (TCEHY)
OTHER OTC:TCEHY
Top Page
Tencent Holdings
(OTC:TCEHY)
Select Model
Select Model
Rating:82Outperform
Price Target:
$99.00
▲(18.27% Upside)
Tencent Holdings' strong financial performance and positive earnings call sentiment are the most significant factors driving the high score. The company's impressive growth in gaming and AI integration supports its long-term potential. However, the high P/E ratio and overbought technical indicators suggest caution in the short term.
Tencent Holdings (TCEHY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$759.36B
Dividend Yield0.6%
Average Volume (3M)134.47K
Price to Earnings (P/E)26.6
Beta (1Y)0.38
Revenue Growth11.83%
EPS Growth39.62%
CountryUS
Employees110,558
SectorCommunication Services
Sector Strength97
IndustryInternet Content & Information
Share Statistics
EPS (TTM)0.95
Shares Outstanding9,153,673,000
10 Day Avg. Volume248,123
30 Day Avg. Volume134,472
Financial Highlights & Ratios
PEG Ratio0.26
Price to Book (P/B)3.70
Price to Sales (P/S)5.45
P/FCF Ratio22.14
Enterprise Value/Market Cap0.80
Enterprise Value/Revenue0.87
Enterprise Value/Gross Profit1.58
Enterprise Value/Ebitda2.40
Forecast
1Y Price Target
$77.00Price Target Upside-8.02% Downside
Rating ConsensusModerate Buy
Number of Analyst Covering1
Tencent Holdings Business Overview & Revenue Model
Company DescriptionTencent 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 MoneyTencent generates revenue through several key avenues. The largest portion of its income comes from online gaming, where it owns popular titles and has stakes in various game developers, both domestically and internationally. Additionally, Tencent earns significant revenue from social networks, primarily through advertising on platforms like WeChat and QQ. Its digital content services, including music and video streaming, contribute to its earnings through subscriptions and advertising. The fintech and business services segment, which encompasses mobile payment solutions like WeChat Pay and cloud computing services, also plays a crucial role in revenue generation. Strategic partnerships with global companies and investments in emerging tech startups further bolster its financial performance, allowing Tencent to diversify its income sources and tap into new markets.
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:
Main Street Data
Main Street DataTencent Holdings Earnings Call Summary
Earnings Call Date:Aug 13, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Nov 13, 2025
Earnings Call Sentiment Positive
The earnings call highlighted Tencent's strong financial performance, driven by significant growth in gaming and marketing services revenue, as well as successful AI integration. Despite some challenges in other losses and long-form video subscriptions, the overall results indicate a positive trend.Q2-2025 Updates
Positive Updates
Double-Digit Revenue and Profit Growth
Total revenue for Q2 2025 was RMB 185 billion, up 15% year-on-year. Gross profit was RMB 105 billion, up 22% year-on-year. Non-IFRS operating profit was RMB 69 billion, up 18% year-on-year.
Gaming Success
Domestic games revenue grew by 17% year-on-year. International games revenue increased by 35% year-on-year. Delta Force became a top 5 game by DAU in China.
AI and Marketing Services Growth
Marketing services revenue grew 20% year-on-year to RMB 36 billion, benefiting from AI-powered adtech upgrades.
Cloud Recognition and Growth
Gartner recognized Tencent Cloud as a top communication platform as a service solution globally for the third consecutive year.
Increased Subscriber Base
Music subscription revenue increased 17% year-on-year, with overall subscribers growing 6% year-on-year to 124 million.
Negative Updates
Other Losses and Increased Finance Costs
Other loss was RMB 3.6 billion compared to a gain of RMB 1.5 billion the previous year, mainly due to lower subsidies and tax rebates, and increased finance costs by 27% year-on-year.
Challenges with Long-form Video
Long-form video subscription revenue decreased 2% year-on-year, with video subscribers declining 3% year-on-year to 114 million.
Company Guidance
During Tencent Holdings Limited's 2025 Second Quarter Results Announcement Webinar, the company reported a robust financial performance, with total revenue reaching RMB 185 billion, a 15% increase year-on-year. Gross profit rose by 22% to RMB 105 billion, and non-IFRS operating profit grew by 18% to RMB 69 billion. Notably, the non-IFRS net profit attributable to equity holders increased by 10% to RMB 63 billion. Tencent's key services, including gaming, social networks, and marketing services, showed significant growth. Communication platforms like Weixin and WeChat saw their monthly active users grow to 1.4 billion. The company's gaming segment experienced a 17% rise in domestic games revenue, while international games revenue surged by 35% year-on-year. Tencent also highlighted the increasing role of AI in their operations, contributing to advancements in advertising and gaming content. The company is strategically investing in AI capabilities, which is evident from the 149% year-on-year increase in operating CapEx, reaching RMB 17.9 billion. The firm's commitment to leveraging AI for enhancing user experience and operational efficiency was a key theme throughout the call.Tencent Holdings Financial Statement Overview
Summary
Tencent Holdings demonstrates strong financial health with impressive profitability margins and revenue growth. The balance sheet is stable, with a good balance between debt and equity, and the company maintains robust cash flows despite a slight decline in Free Cash Flow Growth.Income Statement
Tencent Holdings shows robust revenue growth with a Revenue Growth Rate of 8.41% from 2023 to 2024. The Gross Profit Margin stands at a healthy 52.89%, and the Net Profit Margin is strong at 29.39%. EBIT Margin and EBITDA Margin are also impressive at 31.52% and 46.97%, respectively, indicating solid operational efficiency and profitability.90
Very Positive
Balance Sheet
The company's Debt-to-Equity Ratio is 0.37, reflecting a prudent use of leverage. Return on Equity (ROE) is high at 19.94%, showcasing effective management of equity to generate profits. The Equity Ratio is 54.67%, indicating a stable financial structure with more assets funded by equity than debt.85
Very Positive
Cash Flow
Tencent's Free Cash Flow Growth Rate is -6.94%, slightly declining from the previous year but still maintaining a strong Free Cash Flow. The Operating Cash Flow to Net Income Ratio is 1.33, and the Free Cash Flow to Net Income Ratio is 0.84, both indicating strong cash generation relative to its earnings.88
Very Positive
| 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 | 385.04B | 349.30B | 293.11B | 238.75B | 245.94B | 221.53B |
| EBITDA | 254.13B | 230.09B | 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 | 1.78T | 1.58T | 1.58T | 1.61T | 1.33T |
| Cash, Cash Equivalents and Short-Term Investments | 380.44B | 343.16B | 379.15B | 289.48B | 262.35B | 227.88B |
| Total Debt | 412.49B | 358.11B | 371.24B | 359.14B | 323.48B | 262.46B |
| Total Liabilities | 810.46B | 727.10B | 703.57B | 795.27B | 735.67B | 555.38B |
| Stockholders Equity | 1.11T | 973.55B | 808.59B | 721.39B | 806.30B | 703.98B |
Cash Flow | ||||||
| Free Cash Flow | 187.40B | 162.47B | 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
Neutral
83.71
Price Trends
79.23
Positive
72.49
Positive
65.72
Positive
Market Momentum
2.04
Positive
52.68
Neutral
60.82
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 83.71 is below the 20-day moving average (MA) of 84.50, above the 50-day MA of 79.23, and above the 200-day MA of 65.72, indicating a neutral trend. The MACD of 2.04 indicates Positive momentum. The RSI at 52.68 is Neutral, neither overbought nor oversold. The STOCH value of 60.82 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 |
|---|---|---|---|---|---|---|---|
82 Outperform | $759.36B | 26.59 | 21.04% | 0.60% | 11.83% | 39.62% | |
76 Outperform | $44.49B | 11.17 | 10.33% | ― | -1.32% | 42.56% | |
72 Outperform | $32.63B | 24.28 | 14.07% | 0.80% | 10.66% | 84.89% | |
70 Outperform | $3.13B | 8.76 | 10.77% | 7.20% | 1.21% | 14.72% | |
60 Neutral | $48.67B | 4.58 | -11.27% | 4.14% | 2.83% | -41.78% | |
59 Neutral | $2.82B | ― | -2.32% | 5.13% | -7.07% | -150.40% | |
51 Neutral | $1.10B | 10.53 | 7.65% | ― | -7.33% | -34.16% |
* Communication Services Sector Average
TCEHY
Tencent Holdings
83.71
27.98
50.21%
BIDU
Baidu
121.69
22.58
22.78%
JOYY
JOYY
54.87
21.26
63.25%
WB
Weibo
11.39
2.68
30.77%
MOMO
Hello Group
6.92
0.10
1.47%
TME
Tencent Music Entertainment Group
22.43
9.88
78.73%
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.