Technology Services
Tencent Holdings Ltd.
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Company Background
Tencent Holdings is a Chinese Internet services giant based in Shenzhen, Guangdong Province. It is the biggest rival of Alibaba Group, the country's largest e-commerce company. Baidu, Alibaba and Tencent are commonly known collectively as BAT in China.
Tencent was established in 1998. With the hit of its social network service QQ, users of its smartphone chat app WeChat surged, reaching 549 million at the end of March 2015. WeChat is gaining popularity with young Chinese.
As its revenue mainly comes from PC and smartphone games as well as advertising, increasing QQ and WeChat users is likely to lead to higher earnings.
Ma Huateng, founder and CEO of Tencent, is a young entrepreneur from Shantou, the coastal eastern part of Guangdong Province, where many competent overseas Chinese have their roots. He is also a major shareholder of Tencent, owning some 10% of the company.
Business Summary
Tencent Holdings Ltd. is an investment company, which engages in the provision of value-added services and online advertising services. It operates through the following segments: Value-Added Services, Online Advertising, and Others. The Value-added Services segment involves online and mobile games, community value-added services, and applications across various Internet and mobile platforms. The Online Advertising segment represents display based and performance based advertisements. The Other segment consists of trademark licensing, software development services, software sales, and other services. The company was founded by Yi Dan Chen, Hua Teng Ma, Chen Ye Xu, Li Qing Zeng, and Zhi Dong Zhang in 1998 and is headquartered in Shenzhen, China.
Financial Highlights
| Dec 2018 | HKD | USD |
| Revenue | 370,371.62M | 47,256.07M |
| Gross Profit | 165,629.29M | 21,132.80M |
| Operating income | 90,450.82M | 11,540.70M |
| Income before tax | 110,129.33M | 14,051.50M |
| Net income | 93,239.02M | 11,896.45M |
| EBITDA | 130,736.46M | 16,680.79M |
| Diluted EPS | 9.74 | 1.24 |
| Dividends Per Share | 1 | 0.12 |
| Total Assets | 825,072.33M | 105,381.97M |
| Total liabilities | 418,869.14M | 53,499.86M |
| Total equity | 368,916.93M | 47,119.74M |
| Operating cash flow | 133,371.87M | 17,017.04M |
| Currency in HKD | Currency in USD |
Historical Data
| Dec 2014 | Dec 2015 | Dec 2016 | Dec 2017 | Dec 2018 | |
| Revenue | 99,338.25M | 126,879.52M | 177,527.17M | 274,157.94M | 370,371.62M |
| Gross Profit | 59,129.49M | 73,456.24M | 96,672.61M | 134,824.68M | 165,629.29M |
| Operating income | 32,856.42M | 44,915.96M | 58,308.75M | 76,359.72M | 90,450.82M |
| Income before tax | 36,950.42M | 48,116.84M | 63,283.88M | 100,772.87M | 110,129.33M |
| Net income | 29,965.58M | 35,531.64M | 48,016.15M | 82,457.24M | 93,239.02M |
| EBITDA | 38,898.62M | 53,092.70M | 73,064.71M | 103,424.97M | 130,736.46M |
| Diluted EPS | 3.20 | 3.76 | 5.05 | 8.64 | 9.74 |
| Dividends Per Share | 0.36 | 0.47 | 0.61 | 0.88 | 1 |
| Total Assets | 213,953.36M | 366,189.09M | 441,681.31M | 665,853.41M | 825,072.33M |
| Total liabilities | 111,300.34M | 220,462.02M | 233,896.45M | 333,218.41M | 418,869.14M |
| Total equity | 100,014.31M | 143,262.48M | 194,817.76M | 307,402.83M | 368,916.93M |
| Operating cash flow | 84,804.75M | 59,478.43M | 79,399.88M | 128,774.43M | 133,371.87M |
| Dec 2014 | Dec 2015 | Dec 2016 | Dec 2017 | Dec 2018 | |
| Revenue | 12,810.09M | 16,366.11M | 22,869.97M | 35,180.85M | 47,256.07M |
| Gross Profit | 7,625.00M | 9,475.07M | 12,453.86M | 17,301.14M | 21,132.80M |
| Operating income | 4,236.97M | 5,793.68M | 7,511.63M | 9,798.73M | 11,540.70M |
| Income before tax | 4,764.91M | 6,206.56M | 8,152.55M | 12,931.50M | 14,051.50M |
| Net income | 3,864.19M | 4,583.20M | 6,185.69M | 10,581.18M | 11,896.45M |
| EBITDA | 5,016.14M | 6,848.39M | 9,412.57M | 13,271.83M | 16,680.79M |
| Diluted EPS | 0.41 | 0.48 | 0.65 | 1.10 | 1.24 |
| Dividends Per Share | 0.04 | 0.06 | 0.07 | 0.11 | 0.12 |
| Total Assets | 27,589.62M | 47,249.28M | 56,967.98M | 85,176.90M | 105,381.97M |
| Total liabilities | 14,352.35M | 28,446.16M | 30,167.92M | 42,625.76M | 53,499.86M |
| Total equity | 12,897.00M | 18,485.12M | 25,127.56M | 39,323.40M | 47,119.74M |
| Operating cash flow | 10,935.94M | 7,672.08M | 10,228.70M | 16,524.76M | 17,017.04M |
Valuation Measures
| Dec 2018 | |
| PER | 31.80 |
| ROA | 12.50% |
| ROE | 27.57% |
| Operating margin | 24.42% |
| Profit margin | 25.17% |
Key executives
- Executive Chairman & Chief Executive Officer: Hua Teng Ma
- President & Executive Director: Chi Ping Lau
- COO & President-Interactive Entertainment Group: Yu Xin Ren
- Chief Financial Officer & Senior Vice President: Shek Hon Lo
- Chief Information Officer: Chen Ye Xu
Shareholders
- Naspers Ltd. (30.9%)
- MA HUA TENG PONY (8.5%)
- The Vanguard Group, Inc. (2.1%)
- BlackRock Fund Advisors (1.2%)
- T. Rowe Price Associates, Inc. (Investment Management) (0.9%)
- Temasek Holdings Pte Ltd. (Investment Management) (0.8%)
- Baillie Gifford & Co. (0.8%)
- Norges Bank Investment Management (0.7%)
- Fidelity Management & Research Co. LLC (0.7%)
- JPMorgan Investment Management, Inc. (0.5%)
Contact Details
- Website:http://www.tencent.com
- Address: Tencent Building, Kejizhongyi Avenue, Hi-tech Park, Shenzhen, 518057, China
- Phone: +86.755.8601.3388
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Competitors
- Mail.ru Group Ltd. Sponsored GDR
- LINE Corp.
- Sohu.com Limited Sponsored ADR
- Baidu, Inc. Sponsored ADR Class A
- Link Motion, Inc. Sponsored ADR Class A
- NetEase, Inc. Sponsored ADR
- SINA Corp.
- Alibaba Group Holding Ltd.
- Electronic Arts Inc.
- Ubisoft Entertainment SA
- Phoenix New Media Ltd. Sponsored ADR Class A
- Changyou.com Ltd. Sponsored ADR Class A
- iQIYI, Inc. Sponsored ADR Class A
- Gravity Co Ltd Sponsored ADR
- Liquid Media Group Ltd.
- Netmarble Corp.
- Paradox Interactive AB
- Starbreeze AB
- Frontier Developments Plc
- NetDragon Websoft Holdings Limited
- DouYu International Holdings Ltd. Sponsored ADR
- Facebook, Inc. Class A
- Qutoutiao, Inc. Sponsored ADR Class A
- Aurora Mobile Ltd. Sponsored ADR Class A
- Snap, Inc. Class A
- Xunlei Ltd. ADR
- Shanghai East-China Computer Co., Ltd. Class A
- SciPlay Corp. Class A
- Zynga Inc. Class A
- 36Kr Holdings Inc ADR Class A
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Last Updated on 24 Jan, 2020