# Tencent Holdings (0700.HK)

Canonical: https://gigainvestors.com/s/0700.HK

Analysis as of: 2026-10-16T07:33:29.965Z. Financial observations: FY2003–FY2025.

Listing currency: HKD. Reporting currency: CNY.

## Verdict

A wonderful business at a fair price

Quality tests for Buy: pass (profit record: pass; earnings resilience is evidence only). Published buy qualification: yes.

Share price: HKD 417.80 per share; close as of 2026-10-15.

Estimated value: low HKD 415.86 per share, central HKD 579.53 per share, high HKD 670.82 per share. Buy at or below the central value HKD 579.53 per share. Valuation as of 2026-10-16T07:33:29.965Z; scenarios are not confidence intervals.

Expected annual return: 13.0% at the stated quote. About 13.0% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; HK 10-year bond 4.0% + 4 points).

## Checklist

### understandable: pass

- 1 revenue decline in the last 10 years (informational)

- Financial history: 10 years

- Years with declining revenue: 1

- Years with a net loss: 0

- Operating margin variation: 0.22×

Chart: Operating margin; fiscal year observations.

- FY2016: 0.37×

- FY2017: 0.38×

- FY2018: 0.31×

- FY2019: 0.31×

- FY2020: 0.38×

- FY2021: 0.48×

- FY2022: 0.20×

- FY2023: 0.26×

- FY2024: 0.32×

- FY2025: 0.32×

### moat: pass

- ROIC, median of available years: 23.8%

- ROIC, second-lowest year: 15.8%

- Typical minus recent gross margin: -5.9 pp

- Typical gross margin (annual median): 47.0%

- Recent gross margin (lower of latest and 3-year median): 52.9%

- Years with nonpositive capital: 0

- Capital spending / revenue: 13.6%

- ROIC including acquisitions, ten-year median: 18.4%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2016: 30.4%

- FY2017: 30.4%

- FY2018: 24.7%

- FY2019: 24.1%

- FY2020: 23.4%

- FY2021: 30.4%

- FY2022: 13.8%

- FY2023: 15.8%

- FY2024: 18.3%

- FY2025: 20.6%

### economics: pass

- Owner earnings / net income, 5-yr: 0.82×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: CNY 779B

- Net income, five-year total: CNY 947B

- Return on incremental invested capital: 93.5%

- Working capital / revenue, annual change: 0.8 pp

- Working capital / revenue, change between three-year averages: 6.1 pp

- Working capital / revenue, final three-year average: -4.2%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2021: 0.98×

- FY2022: 0.83×

- FY2023: 0.80×

- FY2024: 0.82×

- FY2025: 0.67×

### management: pass

- Historical market-dollar context (not the management verdict): 2016 to 2025 (9 years)

- buybacks leaned toward cheaper years (informational)

- ROIC first 3 years vs last 3 years: 30.4% vs 18.3%

- Per-share earnings: 4.38 to 20.63 (three-year endpoint medians)

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: -0.1%

- Ordinary dilution, 5-year annual growth: -0.5%

- Market cap gain: CNY 3.32T

- Cumulative retained earnings: CNY 874B

- Diluted shares, 10-year annual growth: -0.1%

- Diluted shares, 5-year annual growth: -0.5%

- $1 test, starting fiscal year: FY2016

- $1 test, ending fiscal year: FY2025

- Per-share value growth: 21.4%

- Per-share value change: CNY 16.25

- Per-share value, starting three-year median: CNY 4.38

- Per-share value, ending three-year median: CNY 20.63

- Buybacks concentrated in cheaper years (correlation): 0.38

- Average buyback yield: 0.9%

- Buyback history: 9 years

- Debt-funded buybacks: No

- Acquisition spending: CNY 226B

- Cumulative net income, 10 years: CNY 1.39T

- ROIC, first three-year median: 30.4%

- ROIC, last three-year median: 18.3%

Chart: Earnings per share; fiscal year observations.

- FY2016: CNY 4.38

- FY2017: CNY 7.59

- FY2018: CNY 8.33

- FY2019: CNY 9.85

- FY2020: CNY 16.83

- FY2021: CNY 23.24

- FY2022: CNY 19.42

- FY2023: CNY 11.99

- FY2024: CNY 20.63

- FY2025: CNY 24.32

### accounting: pass

- Sloan accruals: -3.8%

- Receivables to sales index (DSRI): 0.43×

- Restructuring years, last five: 0

- Stock compensation / operating cash flow: 8.5%

- Earnings backed by cash: Yes

- Operating cash / earnings: 1.35×

- Accounting red flags: 0

- Goodwill and intangibles / equity: 0.31×

Chart: Sloan accruals; fiscal year observations.

- FY2016: -6.2%

- FY2017: -6.2%

- FY2018: -4.5%

- FY2019: -5.9%

- FY2020: -2.6%

- FY2021: 3.1%

- FY2022: 2.7%

- FY2023: -6.8%

- FY2024: -3.6%

- FY2025: -3.8%

## Holders

## Price story

Down 37% since Sep 2025 · "Tencent Stock Slips Again as AI Spending Outruns Profit Growth" (finance.yahoo.com, Aug 2026) · sales +13.9%

Story as of 2026-10-16T09:59:56.432Z; price observation 2026-10-15.

Price needs cash profits to grow 2.9% a year for ten years

- 2025-05-14: Tencent Posts Solid Results as AI Investments Start to Pay Off ([finance.yahoo.com](https://finance.yahoo.com/m/8ad85c9f-cf4b-3b17-91e4-8f0586c51fba/tencent-posts-solid-results.html))

- 2025-08-13: Tencent Posts Earnings Beat as AI Buoys Game, Ad Businesses ([finance.yahoo.com](https://finance.yahoo.com/m/51c10c45-94b8-3e0e-8233-c85300e3f9ea/tencent-posts-earnings-beat.html))

- 2025-11-13: China's Tencent says chip shortage curbs cloud growth despite strong Q3 results ([finance.yahoo.com](https://finance.yahoo.com/news/chinas-tencent-books-15-quarterly-084235512.html))

- 2026-03-20: Alibaba, Tencent Shares Lose $66 Billion as AI Vision Falls Flat ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/alibaba-tencent-shares-lose-66-014755638.html))

- 2026-05-18: TCEHY Stock Declines 4% as Q1 Earnings and Revenues Miss Estimates ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/tcehy-stock-declines-4-q1-121300872.html))

- 2026-08-12: Tencent Stock Drops 4.3% as AI Capex Jumps 66% ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/tencent-stock-drops-4-3-171947375.html))

### Sales · FY2024–2025

sales +13.9%; source https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/; observed 2026-10-16.

- FY2016: CNY 152B 

- FY2017: CNY 238B 

- FY2018: CNY 313B 

- FY2019: CNY 377B 

- FY2020: CNY 482B 

- FY2021: CNY 560B 

- FY2022: CNY 555B 

- FY2023: CNY 609B 

- FY2024: CNY 660B 

- FY2025: CNY 752B 

### Gross margin · FY2025

gross margin 56.3%; source https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/; observed 2026-10-16.

- FY2016: 55.6% 

- FY2017: 49.2% 

- FY2018: 45.5% 

- FY2019: 44.4% 

- FY2020: 46.0% 

- FY2021: 43.9% 

- FY2022: 43.1% 

- FY2023: 48.1% 

- FY2024: 52.9% 

- FY2025: 56.3% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Gets 49.1% of sales from Value-added services; keeps 56.3 cents per sales dollar after product costs.

- Source: https://eodhd.com/api/fundamentals/0700.HK.json#2025-12-31 (filed 2026-10-16T07:33:29.965Z); FY2025: revenue 751766000000; grossProfit 422870000000; margin = grossProfit / revenue.

- Source: https://static.www.tencent.com/uploads/2026/04/09/62d786fcf3d3c8cb7e54791ee95439ac.pdf (filed ); y holders of the Company 259,626 222,703 Annual Report 2025 7 Management Discussion and Analysis Revenues . Revenues increased by 14% year-on-year to RMB751.8 billion for the year ended 31 December 2025. The following table sets forth revenues of the Group and its segments for the years ended 31 December 2025 and 2024. Year ended 31 December Year- on-year 2025 2024 change 2025 2024 Revenues % of total revenues (RMB in millions, unless specified) VAS 369,281 319,168 16% 49% 49% Marketing Services 144,973 121,374 19% 19% 18% FinTech and Business Services 229,435 211,956 8% 31% 32% Others 8,077 7,759 4% 1% 1% The Group 751,766 660,257 14% 100% 100% – Revenues from VAS increased by 16% year-on-year to RMB369.3 billion for the year ended 31 December 2025. Domestic Games revenues were RMB164.2 billion, up 18% year-on-year, underpinned by robust performance of recently released Delta Force, as well as higher revenues from evergreen games such as Honour of Kings and Peacekeeper Elite, and from VALORANT franchise (PC and mobile). International Games revenues were RMB77.4 billion, up 33% year-on-year (32% on a constant-curr

### Why customers stay

Margins ranged from 48.1% to 56.3% during 2023–25; it earns 23.8% on its capital.

- Source: https://eodhd.com/api/fundamentals/0700.HK.json#2023-12-31 (filed 2026-10-16T07:33:29.965Z); FY2023: grossProfit / revenue = 48.1%.

- Source: https://eodhd.com/api/fundamentals/0700.HK.json#2024-12-31 (filed 2026-10-16T07:33:29.965Z); FY2024: grossProfit / revenue = 52.9%.

- Source: https://eodhd.com/api/fundamentals/0700.HK.json#2025-12-31 (filed 2026-10-16T07:33:29.965Z); FY2025: grossProfit / revenue = 56.3%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:33:29.965Z); 10-year return on capital observations [[2016,0.3041550856900558],[2017,0.30408209783354795],[2018,0.24705591801415835],[2019,0.24089935887095906],[2020,0.23418645866335763],[2021,0.3035774827164437],[2022,0.13766485796874786],[2023,0.158399390138377],[2024,0.1825030630415276],[2025,0.2056687482911084]]; median 0.23754290876715833. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Where the cash goes

Reinvests 33.2% of cash earnings; earns 93.5% on new investment.

- Source: https://eodhd.com/api/fundamentals/0700.HK.json#2016-12-31 (filed 2026-10-16T07:33:29.965Z); FY2016: growth capex 6013000000; upkeep 12741000000; owner earnings 41095000000. Growth capex / owner earnings = 0.14631950358924442.

- Source: https://eodhd.com/api/fundamentals/0700.HK.json#2017-12-31 (filed 2026-10-16T07:33:29.965Z); FY2017: growth capex 8393000000; upkeep 23611000000; owner earnings 71510000000. Growth capex / owner earnings = 0.11736820025171305.

- Source: https://eodhd.com/api/fundamentals/0700.HK.json#2018-12-31 (filed 2026-10-16T07:33:29.965Z); FY2018: growth capex 9721858614.355331; upkeep 44339141385.64467; owner earnings 68627858614.35533. Growth capex / owner earnings = 0.1416605269441082.

- Source: https://eodhd.com/api/fundamentals/0700.HK.json#2019-12-31 (filed 2026-10-16T07:33:29.965Z); FY2019: growth capex 8564981365.9218445; upkeep 48423018634.078156; owner earnings 87218581365.92184. Growth capex / owner earnings = 0.09820133774003764.

- Source: https://eodhd.com/api/fundamentals/0700.HK.json#2020-12-31 (filed 2026-10-16T07:33:29.965Z); FY2020: growth capex 14369266293.67852; upkeep 52229733706.32148; owner earnings 155587266293.67853. Growth capex / owner earnings = 0.09235502773444089.

- Source: https://eodhd.com/api/fundamentals/0700.HK.json#2021-12-31 (filed 2026-10-16T07:33:29.965Z); FY2021: growth capex 4495000000; upkeep 57670000000; owner earnings 220432600000. Growth capex / owner earnings = 0.020391720643861206.

- Source: https://eodhd.com/api/fundamentals/0700.HK.json#2022-12-31 (filed 2026-10-16T07:33:29.965Z); FY2022: growth capex 0; upkeep 50850000000; cash acquisitions 1235000000; owner earnings 155854400000. Growth capex plus acquisitions / owner earnings = 0.007924062458294408.

- Source: https://eodhd.com/api/fundamentals/0700.HK.json#2023-12-31 (filed 2026-10-16T07:33:29.965Z); FY2023: growth capex 8434750765.538368; upkeep 38972249234.46163; cash acquisitions 8900000000; owner earnings 92709350765.53836. Growth capex plus acquisitions / owner earnings = 0.18697952927507708.

- Source: https://static.www.tencent.com/uploads/2026/04/09/62d786fcf3d3c8cb7e54791ee95439ac.pdf (filed 2026-10-16T07:33:29.965Z); FY2024: growth capex 7996290592.30629; upkeep 88051709407.69371; cash acquisitions 4941000000; owner earnings 158334890592.30627. Growth capex plus acquisitions / owner earnings = 0.081708400112634.

- Source: https://eodhd.com/api/fundamentals/0700.HK.json#2025-12-31 (filed 2026-10-16T07:33:29.965Z); FY2025: growth capex 15646372425.401276; upkeep 97234627574.59872; cash acquisitions 34717000000; owner earnings 151643172425.40128. Growth capex plus acquisitions / owner earnings = 0.33211763919128523.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:33:29.965Z); Incremental return on capital 0.9350277906085537, from the economics test's unchanged annual inputs.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:33:29.965Z); Dividend observations: [[2016,3699000000],[2017,5052000000],[2018,6776000000],[2019,8315000000],[2020,10339000000],[2021,12503000000],[2022,12952000000],[2023,20983000000],[2024,28859000000],[2025,37535000000]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://eodhd.com/api/fundamentals/0700.HK.json#2025-12-31 (filed 2026-10-16T07:33:29.965Z); FY2025: cash repurchases 73312000000 CNY.

### Are managers owners

Insiders own 31.7% of the company; Ma Huateng holds 8.8% of shares.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); 0700.HK SharesStats.PercentInsiders = 31.727 percentage points; cache date 2026-10-16.

- Source: https://static.www.tencent.com/uploads/2026/04/09/62d786fcf3d3c8cb7e54791ee95439ac.pdf (filed ); isions of the SFO); or (b) were required, pursuant to section 352 of the SFO, to be recorded in the register required to be kept by the Company; or (c) were required, pursuant to the Model Code, to be notified to the Company and the Stock Exchange were as follows: (A) Long position in the shares and underlying shares of the Company Number of Shares/ Approximate % Name of director Nature of interest underlying Shares held of shareholding (Note 7) Ma Huateng Corporate (Note 1) 804,859,700 8.82% Li Dong Sheng Personal* 82,350 0.0009% (Note 2) Ian Charles Stone Personal* 73,951 0.003% + Family 240,000 313,951 (Note 3) Yang Siu Shun Personal* 50,690 0.0006% (Note 4) Ke Yang Personal* 64,719 0.0007% (Note 5) Zhang Xiulan Personal* 34,281 0.0004% (Note 6) Annual Report 2025 69 Directors’ Report Note: 1. Advance Data Services Limited, a British Virgin Islands company wholly-owned by Mr Ma Huateng, holds 709,859,700 Shares directly and 95,000,000 Shares indirectly through its wholly-owned subsidiary, Ma Huateng Global Foundation Limited (formerly known as Ma Huateng Global Foundation). 2. The interest comprises 54,037 Shares and 28,313 un

### What the price says

The price assumes cash profits grow 2.9% yearly over ten years; actual growth was 19.1%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:33:29.965Z); Ten-year compound average after fade. Initial solved rate 0.02809795555430871. Price 417.8; FX 1.1727222788982186; discount 0.1; same compounder ten-year fade to terminal 0.03. FY2015 owner earnings/share 2.8590384206502435 → FY2025 16.404497233383953. Closing-price date 2026-10-15.

## Monthly share-price history (HKD per share)

- 2016-10: HKD 189.72 per share

- 2016-11: HKD 178.56 per share

- 2016-12: HKD 174.88 per share

- 2017-01: HKD 188.43 per share

- 2017-02: HKD 190.82 per share

- 2017-03: HKD 205.39 per share

- 2017-04: HKD 224.38 per share

- 2017-05: HKD 246.69 per share

- 2017-06: HKD 257.38 per share

- 2017-07: HKD 288.91 per share

- 2017-08: HKD 303.29 per share

- 2017-09: HKD 309.93 per share

- 2017-10: HKD 322.47 per share

- 2017-11: HKD 366.90 per share

- 2017-12: HKD 374.27 per share

- 2018-01: HKD 427.37 per share

- 2018-02: HKD 398.43 per share

- 2018-03: HKD 377.59 per share

- 2018-04: HKD 360.45 per share

- 2018-05: HKD 368.00 per share

- 2018-06: HKD 363.03 per share

- 2018-07: HKD 327.44 per share

- 2018-08: HKD 313.43 per share

- 2018-09: HKD 297.94 per share

- 2018-10: HKD 246.14 per share

- 2018-11: HKD 287.62 per share

- 2018-12: HKD 289.46 per share

- 2019-01: HKD 318.96 per share

- 2019-02: HKD 309.56 per share

- 2019-03: HKD 332.79 per share

- 2019-04: HKD 357.68 per share

- 2019-05: HKD 300.53 per share

- 2019-06: HKD 325.05 per share

- 2019-07: HKD 339.43 per share

- 2019-08: HKD 299.42 per share

- 2019-09: HKD 304.40 per share

- 2019-10: HKD 295.73 per share

- 2019-11: HKD 305.87 per share

- 2019-12: HKD 346.25 per share

- 2020-01: HKD 343.85 per share

- 2020-02: HKD 355.84 per share

- 2020-03: HKD 350.49 per share

- 2020-04: HKD 384.41 per share

- 2020-05: HKD 378.33 per share

- 2020-06: HKD 459.64 per share

- 2020-07: HKD 492.27 per share

- 2020-08: HKD 489.04 per share

- 2020-09: HKD 471.53 per share

- 2020-10: HKD 544.82 per share

- 2020-11: HKD 519.00 per share

- 2020-12: HKD 519.93 per share

- 2021-01: HKD 628.24 per share

- 2021-02: HKD 610.73 per share

- 2021-03: HKD 562.33 per share

- 2021-04: HKD 574.32 per share

- 2021-05: HKD 570.63 per share

- 2021-06: HKD 538.36 per share

- 2021-07: HKD 441.57 per share

- 2021-08: HKD 443.60 per share

- 2021-09: HKD 425.34 per share

- 2021-10: HKD 443.41 per share

- 2021-11: HKD 423.50 per share

- 2021-12: HKD 421.10 per share

- 2022-01: HKD 448.30 per share

- 2022-02: HKD 400.05 per share

- 2022-03: HKD 355.41 per share

- 2022-04: HKD 358.45 per share

- 2022-05: HKD 344.20 per share

- 2022-06: HKD 336.60 per share

- 2022-07: HKD 291.39 per share

- 2022-08: HKD 310.77 per share

- 2022-09: HKD 253.02 per share

- 2022-10: HKD 195.27 per share

- 2022-11: HKD 272.78 per share

- 2022-12: HKD 317.23 per share

- 2023-01: HKD 382.20 per share

- 2023-02: HKD 343.60 per share

- 2023-03: HKD 385.80 per share

- 2023-04: HKD 344.40 per share

- 2023-05: HKD 310.60 per share

- 2023-06: HKD 331.60 per share

- 2023-07: HKD 354.40 per share

- 2023-08: HKD 325.00 per share

- 2023-09: HKD 306.20 per share

- 2023-10: HKD 289.20 per share

- 2023-11: HKD 327.00 per share

- 2023-12: HKD 293.60 per share

- 2024-01: HKD 270.60 per share

- 2024-02: HKD 277.20 per share

- 2024-03: HKD 303.80 per share

- 2024-04: HKD 347.20 per share

- 2024-05: HKD 359.80 per share

- 2024-06: HKD 372.40 per share

- 2024-07: HKD 362.20 per share

- 2024-08: HKD 382.00 per share

- 2024-09: HKD 444.60 per share

- 2024-10: HKD 404.60 per share

- 2024-11: HKD 398.00 per share

- 2024-12: HKD 417.00 per share

- 2025-01: HKD 401.20 per share

- 2025-02: HKD 478.60 per share

- 2025-03: HKD 497.00 per share

- 2025-04: HKD 477.20 per share

- 2025-05: HKD 498.20 per share

- 2025-06: HKD 503.00 per share

- 2025-07: HKD 550.00 per share

- 2025-08: HKD 596.50 per share

- 2025-09: HKD 663.00 per share

- 2025-10: HKD 629.00 per share

- 2025-11: HKD 611.50 per share

- 2025-12: HKD 599.00 per share

- 2026-01: HKD 606.00 per share

- 2026-02: HKD 518.00 per share

- 2026-03: HKD 484.00 per share

- 2026-04: HKD 467.80 per share

- 2026-05: HKD 427.20 per share

- 2026-06: HKD 429.80 per share

- 2026-07: HKD 475.20 per share

- 2026-08: HKD 453.00 per share

- 2026-09: HKD 431.00 per share

- 2026-10: HKD 417.80 per share

## Annual estimated value (HKD per share)

- FY2016: low HKD 85.00 per share, central HKD 114.92 per share, high HKD 132.34 per share

- FY2017: low HKD 126.49 per share, central HKD 173.14 per share, high HKD 200.31 per share

- FY2018: low HKD 162.96 per share, central HKD 224.10 per share, high HKD 259.69 per share

- FY2019: low HKD 186.41 per share, central HKD 256.78 per share, high HKD 297.76 per share

- FY2020: low HKD 246.10 per share, central HKD 339.91 per share, high HKD 394.53 per share

- FY2021: low HKD 308.26 per share, central HKD 427.21 per share, high HKD 496.47 per share

- FY2022: low HKD 289.81 per share, central HKD 399.64 per share, high HKD 463.59 per share

- FY2023: low HKD 347.68 per share, central HKD 486.82 per share, high HKD 564.43 per share

- FY2024: low HKD 376.80 per share, central HKD 530.89 per share, high HKD 616.83 per share

- FY2025: low HKD 385.24 per share, central HKD 537.60 per share, high HKD 622.57 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

## Sources

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.

## Reported holder observations