Tencent Holdings Limited
Tencent Holdings Limited Fundamental Analysis
Tencent Holdings Limited (TCTZF) shows strong financial fundamentals with a PE ratio of 19.07, profit margin of 29.86%, and ROE of 20.26%. The company generates $724.9B in annual revenue with moderate year-over-year growth of 8.41%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 81.7/100 based on profitability, valuation, growth, and balance sheet metrics. The B+ grade reflects solid fundamentals with room for improvement in valuation or growth.
Fundamental Health Score
We analyze TCTZF's fundamental strength across five key dimensions:
Efficiency Score
ExcellentTCTZF demonstrates superior asset utilization.
Valuation Score
ExcellentTCTZF trades at attractive valuation levels.
Growth Score
ExcellentTCTZF delivers strong and consistent growth momentum.
Financial Health Score
ExcellentTCTZF maintains a strong and stable balance sheet.
Profitability Score
ExcellentTCTZF achieves industry-leading margins.
Key Financial Metrics
Is TCTZF Expensive or Cheap?
P/E Ratio
TCTZF trades at 19.07 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, TCTZF's PEG of 0.51 indicates potential undervaluation.
Price to Book
The market values Tencent Holdings Limited at 3.55 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 13.42 times EBITDA. This signals the market has high growth expectations.
How Well Does TCTZF Make Money?
Net Profit Margin
For every $100 in sales, Tencent Holdings Limited keeps $29.86 as profit after all expenses.
Operating Margin
Core operations generate 31.82 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $20.26 in profit for every $100 of shareholder equity.
ROA
Tencent Holdings Limited generates $10.51 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Tencent Holdings Limited generates strong operating cash flow of $281.46B, reflecting robust business health.
Free Cash Flow
Tencent Holdings Limited generates strong free cash flow of $186.16B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $20.64 in free cash annually.
FCF Yield
TCTZF converts 4.54% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
19.07
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.51
vs 25 benchmark
P/B Ratio
Price to book value ratio
3.55
vs 25 benchmark
P/S Ratio
Price to sales ratio
5.66
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.35
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.36
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.20
vs 25 benchmark
ROA
Return on assets percentage
0.11
vs 25 benchmark
ROCE
Return on capital employed
0.14
vs 25 benchmark
How TCTZF Stacks Against Its Sector Peers
| Metric | TCTZF Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 19.07 | 22.05 | Better (Cheaper) |
| ROE | 20.26% | 1173.00% | Weak |
| Net Margin | 29.86% | -64583.00% (disorted) | Strong |
| Debt/Equity | 0.35 | 1.36 | Strong (Low Leverage) |
| Current Ratio | 1.36 | 1.58 | Neutral |
| ROA | 10.51% | -200331.00% (disorted) | Strong |
TCTZF outperforms its industry in 4 out of 6 key metrics, particularly excelling in Net Margin, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Tencent Holdings Limited's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
78.76%
Industry Style: Growth, Technology, Streaming
High GrowthEPS CAGR
112.45%
Industry Style: Growth, Technology, Streaming
High GrowthFCF CAGR
77.72%
Industry Style: Growth, Technology, Streaming
High Growth