Tencent Holdings Ltd

HKG: 0700 · SEHK · Communications Services

Current price

HK$423.40

▼ −HK$1.80 (0.42%) today

Share price

Live market data

▼ -215.60 (-33.74%)2025-10-13 — 2026-10-14

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ET&A View

Last reviewed 17 September 2026

Buy

ET&A sees significant upside from the current price with an attractive risk/reward profile.

Fair Value

Members

12M Price Target

Members

Preferred Entry

Members

ET&A Score

9.2/ 10Strong overall

Members see what we think Tencent Holdings Ltd is worth today, our 12-month Price Target, the price we would prefer to buy at and the return we expect. See membership

Tencent is one of the highest-quality digital-platform businesses globally, combining Weixin and WeChat's enormous network effects with leading franchises across gaming, advertising, payments, cloud and digital content.

Is it expensive?

Read our full view

Why we like it

Turns about 24% of its sales into spare cash.
Very profitable — keeps about 33% of its sales as profit.
Little debt — less than a year's earnings would repay it.

What worries us

The share price has been weak recently.

Members see every risk we are watching. See membership

Business Health

Is the business financially healthy?

Yes — healthy

Revenue, margins, cash generation and the balance sheet stand out.

Overall

Strong

Revenue
CN¥788.5bn · ↑ +14% last year
Growth Strong
Earnings
CN¥235.5bn · ↑ +16% last year
Growth Good
Margins
Keeps 33% of sales as operating profit
Excellent
Cash generation
CN¥190.2bn spare cash a year · 24% of sales
Excellent
Balance sheet
Debt ≈ 0.0 years of earnings
Excellent
Dividend
1.3% yield · Pays out 19% of earnings · covered 5.3×
Yield Below Average

Financial and earnings trends

Investor View

More on Tencent Holdings Ltd

Open a section for the detail behind the quick view.

Our full viewET&A's complete thesis — why we hold the view we do.Members

Insight

The complete ET&A view

See our full reasoning, what could drive the shares higher or go wrong, our Fair Value and Preferred Entry, and how our view has changed.

Our View in full
What could drive it higher / go wrong
Fair Value & Preferred Entry
How our view has changed

Explore Insight →Included with Insight

What could drive it higher — and what could go wrongThe catalysts and risks we are watching.Members

Members see every catalyst and risk we are watching. See membership

Valuation discussionWhere today's price sits, and how it compares with the company's own history and its peers.Members

Members see where the price sits against our valuation, its history and its peers. See membership

Financial and earnings trendsSales, margins, profit, earnings per share and cash, year by year.

Reported annual results, newest first · Market data. “Growth” is the change in sales on the year before.

Year	Revenue	Growth	Operating margin	Net income	EPS	Free cash flow
FY2025	CN¥751.8bn	+13.9%	33.1%	CN¥224.8bn	CN¥24.15	CN¥190.2bn
FY2024	CN¥660.3bn	+8.4%	31.6%	CN¥194.1bn	CN¥20.49	CN¥162.5bn
FY2023	CN¥609.0bn	+9.8%	27.2%	CN¥115.2bn	CN¥11.89	CN¥174.6bn
FY2022	CN¥554.6bn	—	20.5%	CN¥188.2bn	CN¥19.34	CN¥95.2bn

Next earningsWed, 18 Nov 2026Earnings calendar →

Who it suitsStrategy suitability and investment style.

Long-term growth investors

Also suits: Investors who want a mix of growth and stability

Investment styleQualityGrowthValueET&A strategies: Balanced, Growth · what these mean

How it compares with peersOther companies we cover in Communications Services.

We don’t cover another company in this sector yet.

Compare Tencent Holdings Ltd with any company → The model’s own peer calculations are in the Research View.

What the company doesThe full company profile.

Tencent Holdings Limited is one of China’s largest technology and internet companies, with operations spanning social media, messaging, online gaming, digital content, advertising, fintech, cloud computing, artificial intelligence, and enterprise services. The company is best known for Weixin and WeChat, QQ, Tencent Games, Weixin Pay, Tencent Cloud, and a wider digital ecosystem that connects consumers, businesses, developers, advertisers, and content creators.

Tencent’s strength comes from the scale and depth of its ecosystem. Weixin and WeChat give the company a powerful position in communication, payments, mini-programs, content, commerce, and everyday digital services in China, while its gaming business gives it major global exposure to interactive entertainment. Alongside this, Tencent’s cloud, fintech, advertising, and AI-related services position it as a key digital infrastructure company for both consumers and enterprises.

Communications Services · China

Research ViewOpen the full researchFull financial statements, valuation multiples, historical data, forecasts, methodology, scoring calculations and the valuation model.Open

For detailed analysis. Each section opens on its own.

Financial statementsEvery published figure with its source, the market snapshot and connected sheets.

Income

Revenue: CN¥788.5bnMarket data
Gross profit: CN¥447.1bnMarket data
EBITDA: CN¥297.0bnMarket data
Operating profit (EBIT): CN¥248.8bnMarket data
Net income: CN¥235.5bnMarket data
Earnings per share (EPS): CN¥28.29Market data

Growth

Revenue growth, latest year: Strong13.9%Calculated
Revenue growth, 3-year average: Strong10.7%Calculated
Earnings growth, latest year: Strong15.9%Calculated
Earnings growth, 3-year average: Good6.1%Calculated
Revenue growth, latest quarter vs a year earlier: 11.0%Market data
Earnings growth, latest quarter vs a year earlier: 1.8%Market data

Margins & returns

Gross margin: Strong56.7%Market data
EBITDA margin: 37.7%Market data
Operating margin: Excellent32.9%Market data
Net margin: Excellent29.9%Market data
Return on equity (ROE): Strong19.9%Market data
Return on assets (ROA): 7.9%Market data

Cash flow

Operating cash flow: CN¥305.8bnMarket data
Free cash flow: CN¥190.2bnMarket data
Free-cash-flow margin: Excellent24.1%Calculated
Free cash flow ÷ net income: 0.8×Calculated

Balance sheet

Cash: CN¥458.9bnMarket data
Total debt: CN¥471.8bnMarket data
Net debt: CN¥12.9bnMarket data
Net debt ÷ EBITDA: Excellent0.0×Calculated
Debt ÷ equity: 0.4×Market data
Current ratio: 1.3×Market data

Shares & dividends

Shares outstanding: 9.01bnMarket data
Market capitalisation: CN¥3.81tnMarket data
Dividend per share: CN¥4.76Market data
Dividend yield: Below Average1.3%Market data
Payout ratio: 18.8%Market data

Market data — the live feed (Yahoo Finance)
Calculated — worked out by ET&A from the figures shown, using the formulas in our methodology

Other published figures

Price / Sales: Members
EV / EBITDA: Members
Price / Book: Members
Forward P/E: Members

Valuation ratios (P/E, P/S, P/B, EV/EBITDA) are part of ET&A membership — view plans.

Market data

Live

PriceHK$423.40

Day−HK$1.80 (−0.42%)

52-week rangeHK$411.40 – HK$657.00

vs 52-week low+2.92%

vs 52-week high−35.56%

As of 14 October 2026

P/E Ratio: 14.97x

Valuation multiplesP/E, forward P/E, EV/EBITDA, Price/Sales and FCF yield — today and at Fair Value.Members

Standard ways of comparing the share price with the company’s earnings, sales and cash. Tap the “i” for what each one means.

Measure	Today	Source
P/E	Members
Forward P/E	Members
EV/EBITDA	Members
Price/Sales	Members
FCF Yield	Members

Valuation ratios are part of ET&A membership.

Other published measures

Price / Book: Members

Historical dataValuation history, how our view has changed, and the share-price history.

Valuation history

Members see how the valuation compares with its history. See membership

Share-price history

Use the 5Y and Max ranges on the price chart at the top of the page.

ForecastsWhat analysts expect — market consensus, not ET&A estimates.

Forecasts

Forward EPS (next year, consensus): CN¥36.02Market data
Expected EPS growth, next year: Average3.9%Market data
Expected revenue growth, next year: 9.8%Market data

Forecasts are market consensus or calculated from forward EPS — not ET&A estimates, and they can be wrong.

MethodologyHow ET&A values a company and reaches a view.

How we value Tencent Holdings Ltd

1. The right method for the business. Each business is valued on the method that suits its economics — earnings for most companies, book value and returns for banks and insurers, cash flows or dividends where earnings mislead.
2. What the business deserves. ET&A builds a fair multiple from the company's own quality, sustainable growth, earnings predictability and risk. History, peers and the market are checked against it, but they don't set it.
3. Fair Value. The earnings (or other basis) per share multiplied by that fair multiple, cross-checked against independent methods.
4. Preferred Entry. A price below Fair Value that leaves room for the return ET&A requires for the company's risk.
5. Is it expensive? Today’s price is placed on ET&A’s Valuation Attractiveness scale — the same measure the ET&A Score uses. Cheap is the Preferred Entry; above Fair Value the shares are Expensive, and Very Expensive once they are more than 25% above it.

Read the full ET&A methodology →

How we reach a view

The ET&A View combines our assessment of the business with where today’s price sits against our Preferred Entry and Fair Value. It is a considered judgement, not a mechanical score.

Business quality
Financial performance
Growth outlook
Debt and financial strength
Valuation
Risk
What could drive it higher

Buy: ET&A sees significant upside from the current price with an attractive risk/reward profile.
Accumulate: ET&A likes the company but would prefer investors to build exposure gradually.
Hold: ET&A sees limited reason to buy aggressively or sell at the current price.
Reduce: ET&A believes the current valuation or risk profile makes a smaller position more appropriate.
Sell: ET&A believes the downside risk materially outweighs the potential return at the current price.

ET&A Score: ET&A's overall assessment of business quality, valuation, growth and risk, out of 10. It weighs business quality, financial strength, growth, valuation, risk, future prospects.

Scoring calculationsBehind the ET&A Score and the Business Health ratings.

Behind the ET&A Score

The automatic, rules-based scores that feed our research. The ET&A Score blends these with our own analysis of the business and its value. How the framework works →

ET&A Quant Score

Favourable

Highly profitable · Strong balance sheet · Weak

Profitability & margins · Highly profitable9.0

Balance sheet · Strong balance sheet8.4

Price momentum · Weak0.0

Context — not part of the score

Valuation multiplesFairly priced
Share-price steadinessHigh volatility
IncomeLow yield

Valuation and share-price swings describe the shares, not the company, so they are judged in the ET&A Score and View instead.

Annualised volatility: Members
Max drawdown (1y): Members
12-month return: Members
3-month return: Members
P/E: Members
Price / Sales: Members
EV / EBITDA: Members
EBITDA margin: Members
Net debt / EBITDA: Members
Dividend yield: Members

The detailed figures behind these scores — price swings, past falls, returns, valuation and margins — are part of ET&A membership. View plans

Based on the factors that could be measured (45% of the model).

Business Health ratings

Each area is scored from 0 to 10 on ET&A’s methodology scales — the same ones our research uses — then given a word: Excellent from 8.5, Strong from 7, Good from 5.5, Average from 4.5, Below Average from 3, Weak below 3. The overall answer is the average of the areas we could rate (at least three); the dividend isn’t part of it.

Area	Based on	Score	Rating
Revenue	Revenue growth, 3-year average 10.7% → 7.1 Rated on 3-year average revenue growth, on ET&A's growth scale.	7.1 / 10	Strong
Earnings	Earnings growth, 3-year average 6.1% → 5.8 Rated on 3-year average earnings growth, on ET&A's growth scale.	5.8 / 10	Good
Margins	Operating margin 32.9% → 9.1 Net margin 29.9% → 9.0 The average of operating and net margin, each scored on ET&A's margin scales. A negative margin scores 1 (Weak).	9.1 / 10	Excellent
Cash generation	Free-cash-flow margin 24.1% → 9.5 Free cash flow as a share of sales, on ET&A's cash-generation scale.	9.5 / 10	Excellent
Balance sheet	Net debt ÷ EBITDA 0.0× → 8.5 Net debt ÷ EBITDA — roughly how many years of operating earnings would repay the debt — on ET&A's leverage scale.	8.5 / 10	Excellent
Dividend	Dividend yield 1.3% → 3.5 Dividend yield on ET&A's income scale. Not part of the overall health rating.	3.5 / 10	Below Average
Overall	Average of the 5 rated areas	8.0 / 10	Strong

ET&A's scales

Where each band starts on the scales above. They are fixed and identical for every company we cover; they come straight from ET&A’s methodology, so a company is judged the same way here as in our research.

Measure	Excellent	Strong	Good	Average	Below Average	Weak
GrowthStructural Growth (Fundamental Conviction)	18%+	10%+	5.0%+	1.7%+	−2.5%+	below −2.5%
Operating marginCompetitive Position (Fundamental Conviction)	29%+	20%+	13%+	7.5%+	0%+	below 0% (loss)
Net marginEarnings Durability (Fundamental Conviction)	23%+	15%+	9.8%+	6.0%+	0%+	below 0% (loss)
Free-cash-flow marginCapital Allocation (Fundamental Conviction)	15%+	8.5%+	3.8%+	1.3%+	−2.5%+	below −2.5%
Net debt ÷ EBITDAStructural Risk (Fundamental Conviction)	net cash	≤ 1.5×	≤ 2.8×	≤ 3.6×	≤ 5.0×	above 5.0×
Return on equity (banks & insurers)Bank and insurer quality	16%+	12%+	9.0%+	6.7%+	2.7%+	below 2.7%
Equity ÷ assetsBank capital	7.5%+	6.0%+	4.7%+	4.0%+	any	—
Dividend yieldIncome factor (ET&A Quant Score)	5.8%+	4.0%+	2.5%+	1.8%+	1.0%+	below 1.0%

Band floors: Excellent 8.5 · Strong 7 · Good 5.5 · Average 4.5 · Below Average 3 (scores out of 10). Utilities and property companies’ structural debt is scored 6.5, as in ET&A’s risk model.

Valuation model outputsFair Value, the 12-Month Price Target, Preferred Entry and the expected return — and how each was calculated.Members

Members see how we calculate the Fair Value and Preferred Entry. See membership

Peer calculationsThe comparable companies the valuation model used, with their multiples and returns.Members

Members see the peer set behind our valuation. See membership

Detailed assumptionsEvery input the valuation model used, with its source.Members

Members see the assumptions behind our valuation. See membership

Research notesNo research notes published yet.

No research notes have been published for Tencent Holdings Ltd yet.

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