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Tencent Holdings Ltd ADR TCEHY

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Stock PINX Rating as of
$47.46 +0.10 (0.21%)
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As of Delayed Price Closed
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Company Report

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Huawei's Potential Fee Shakeup Could Be a Win for Game Developers

Ivan Su

There have long been complaints that app stores take too big a share of in-app purchases, but nothing has managed to shake the 30% take-rate standard over the past decade. However, Bloomberg’s recent report on Huawei's talks with Tencent to establish a lower-than-industry share of 20% for in-game purchases provides hope for a reset. This move also reinforces our call for higher profitability for gaming companies over the long run. Although the Huawei HarmonyOS mobile operating system currently represents a small percentage of smartphones in China, the potential lowering of its app store fee to 20% could pressure other mobile app platforms to follow suit.

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Price vs Fair Value

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TCEHY is trading at a 397% premium.
Price
$47.46
Fair Value
$83.00
Uncertainty
High
1-Star Price
$761.10
5-Star Price
$41.00
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Many of Tencent's products are still in the early stages of monetization.

Bears

Chinese regulators have become more assertive. There is always the possibility that the government may want more control over internet businesses by curbing monetization, limiting collection of user data, or restricting acquisitions.

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Trading Information

Previous Close Price
$47.36
Day Range
$47.42–47.87
52-Week Range
$33.00–52.10
Bid/Ask
$47.43 / $47.46
Market Cap
$443.59 Bil
Volume/Avg
1.7 Mil / 2.4 Mil

Key Statistics

Price/Earnings (Normalized)
20.27
Price/Sales
5.30
Dividend Yield (Trailing)
0.91%
Dividend Yield (Forward)
0.91%
Total Yield
2.30%

Company Profile

Tencent is arguably the most influential internet firm in China, as one can hardly go a day without using its products. Tencent is the world's largest video game vendor and owns the world's top-grossing mobile game—Honor of Kings. Tencent also runs China's largest social media super app—WeChat. The app is now part of the fabric of life for Chinese people who use it to chat, shop, watch videos, play games, order food and taxis, and more. Equally as impressive as its own portfolio, Tencent is also among the world's largest venture capital and investment corporations. The firm is now one of the largest shareholders in leading tech companies like PDD, Kuaishou, Epic Games and more.
Sector
Communication Services
Industry
Internet Content & Information
Stock Style Box
Large Core
Total Number of Employees
104,787
Website
http://www.tencent.com

Competitors

Valuation

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Metric
TCEHY
NTES
BABA
Price/Earnings (Normalized)
 20.2713.638.31
Price/Book Value
 3.743.481.27
Price/Sales
 5.304.261.40
Price/Cash Flow
 16.8712.666.69
Price/Earnings
TCEHY
NTES
BABA

Financial Strength

Metric
TCEHY
NTES
BABA
Quick Ratio
 1.302.371.55
Current Ratio
 1.472.531.79
Interest Coverage
 13.41—6.67
Quick Ratio
TCEHY
NTES
BABA

Profitability

Metric
TCEHY
NTES
BABA
Return on Assets (Normalized)
 10.08%14.59%4.42%
Return on Equity (Normalized)
 20.37%22.05%7.83%
Return on Invested Capital (Normalized)
 12.97%15.46%7.04%
Return on Assets
TCEHY
NTES
BABA
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