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Tencent Holdings Ltd ADR - Stock Quote TCEHY

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Morningstar's Tencent Holdings Ltd ADR Stock Analysis

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Is it the right time to buy or sell?

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5-Star Price

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Economic Moat

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Capital Allocation

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Market Fixation on Its Near-Term Revenue Overshadowing Tencent's Long-Term Opportunities

Ivan Su Senior Equity Analyst

Analyst Note

| Ivan Su |

Wide-moat Tencent's first-quarter results again show the continuing impact of macroeconomic headwinds and regulatory changes. The gapping down in the stock shows that the market is still focused on near-term headwinds, and while we acknowledge that there are legitimate questions about earnings declines for the next one to two quarters, we believe a turnaround is in clear sight. We lower our fair value estimate to HKD 741 per share from HKD 837 to reflect changes in the market value of Tencent's investment holdings and recent significant depreciation of the Chinese yuan against the Hong Kong dollar. We remain confident in Tencent's longer-term free cash flow potential and view current share prices as an opportunistic entry point.

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Tencent Holdings Ltd ADR's Company Profile

Business Description

Tencent is arguably the most influential internet firm in China as one can hardly go by 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 Meituan, JD, DiDi, Snap, PDD, Kuaishou, Epic Games, and more.

Contact
No. 33 Haitian 2nd Road, Tencent Binhai Towers
Shenzhen, 518054, China, People's Republic of
T +86 75586013388
Sector Communication Services
Industry Internet Content & Information
Most Recent Earnings Mar 31, 2022
Fiscal Year End Dec 31, 2022
Stock Type
Employees 116,213

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