Tencent Holdings’ stock (0700.HK) is listed on the Hong Kong Stock Exchange (HKEX) under the ticker symbol 0700.HK. You can also buy Tencent on the U.S over-the-counter market under the ticker TCEHY.
Tencent Chart Today (0700.HK)
Tencent has made significant investments in global tech companies. Its vast portfolio of services and investments has enabled Tencent to become one of the most valuable tech companies globally, with it’s stock a key component in the Hang Seng Index.
The company is best known for its flagship social platforms, WeChat and QQ, which have more than 1 billion active users, as well as its leadership in online gaming through Tencent Games, one of the world’s largest gaming companies by revenue.
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Tech Industry Comparison
Tencent Holdings is one of the world’s largest technology businesses and the dominant player in China’s social media and gaming sectors. Founded in 1998 and headquartered in Shenzhen, China, Tencent operates across a wide range of digital services, including social networking, digital payments, cloud computing, artificial intelligence, and entertainment.
Tencent EPS and Revenue Breakdown 2020-2023
| Year | EPS | Annual Revenue |
|---|---|---|
| 2020 | $2.48 | $70.35 billion |
| 2021 | $3.66 | $86.61 billion |
| 2022 | $2.88 | $82.03 billion |
| 2023 | $2.98 | $84.60 billion |
Tencent Price & Dividend Yield
Tencent’s stock price has experienced significant fluctuations over the last few years, driven by its strong business performance, regulatory pressures in China, and economic headwinds. In 2021, the stock hit an all-time high of well over HKD 700 a share, driven by robust growth in gaming and social media. However, Chinese government crackdowns on the tech sector and economic headwinds in China have had an impact. However, it has risen so far in 2024, climbing 46% for the year-to-date (as of October 11, 2024), being boosted by the recently announced economic stimulus in China.
Dividend Yield: 0.78%
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Tencent Share Price Forecast
Analysts covering Tencent remain optimistic about the company’s future. Out of 59 analysts, a substantial 56 recommend a Buy rating, one issued a Hold rating, and two suggest a Sell rating.
A View From The Bulls: In June, analysts at Goldman Sachs added Tencent to the bank’s APAC Conviction List, saying they expect “visible and sustainable” profit growth of 20% or more, driven by new game titles and advertising market share gains from advertising technology upgrades. The bank has a Buy rating on the stock with a HKD 477 price target. Meanwhile, Barclays raised its price target on Tencent to $59 from $46 in a recent note, maintaining an Overweight rating on the shares. They noted Tencent reported strong Q1 results, showing it is possibly the only large-cap Chinese internet company seeing margin expansion in 2024.
A View From The Bears: The current bearish views on Tencent are thin. However, some have expressed concerns about regulatory pressure in China, particularly in the gaming sector, which has previously faced strict government limits. There is also the factor of increased competition from ByteDance and other tech players, which could impact Tencent’s user growth and engagement. Overall, analysts should be aware of regulatory scrutiny, increased competition, economic slowdown, valuation concerns, and geopolitical risks, as these could limit its growth potential and profitability. These factors may present downside risks for investors considering Tencent shares.
Average Analyst Consensus 12-Month Price Target: HKD 492.8
Our View:
While the company faces some risks in China, its strong fundamentals and leading position in key digital industries make it a potentially rewarding investment for long-term investors.
Tencent’s international growth strategy, particularly in gaming, coupled with its investments in emerging technologies such as AI and cloud computing, provides multiple growth avenues. However, investors should remain cautious of the unpredictable regulatory landscape in China, as well as the economic climate in the country, as these factors could weigh on the stock in the near term
Who Should Buy Tencent Shares?
Tencent’s stock appeals to investors who are optimistic about the future of digital services, gaming, and social media in China and globally. The company’s leadership in multiple high-growth sectors—ranging from online gaming to fintech—makes it a strong candidate for growth-focused portfolios.
The firm’s large user base and ability to monetise through its various services, including WeChat Pay and advertising, provide steady revenue streams.
However, investors should be mindful of the regulatory risks that come with investing in Chinese tech companies. The Chinese government’s policies regarding gaming, data privacy, and monopolistic practices could negatively impact Tencent’s growth and profitability.
Investors seeking dividends may also find Tencent appealing, as the company has been returning value to shareholders through dividend payments, though they are relatively modest compared to its earnings.
