Tencent Holdings Limited

NNND.F

Internet Content & Information · Communication Services

Price

€51.77

-1.73 (-3.23%)

Market Cap

€467.64B

Exchange

Frankfurt Stock Exchange

Winston Score

Winston is happy

A high-quality business with solid fundamentals.

Share count falling — buybacks

−4.7% over 4y

The company has reduced its share count over this period, returning value to shareholders through buybacks.

Diluted shares outstanding: 9.70B (2021) → 9.24B (2025)

Tencent is a Chinese technology giant that runs some of the most widely used apps in China. Its biggest product is WeChat, a super-app used by over a billion people for messaging, payments, shopping, and more. Tencent also operates one of the world's largest video game businesses, owning stakes in game studios like Riot Games and publishing popular titles across mobile and PC.

Tencent makes money through online advertising, in-app purchases in games, digital payments, and cloud services. It operates mainly in China but has a large international footprint through minority investments in companies like Epic Games, Spotify, and Sea Limited. Its moat comes from WeChat's deep integration into daily life in China, which makes it very hard for competitors to displace. The biggest risk the company faces is ongoing regulatory pressure from the Chinese government, which has previously restricted gaming licenses and scrutinized its business practices.

Winston Score History

Growth Profile

For growth stock investors

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

+7.7% YoY

YoY Growth Rate

Slow revenue growth

EPS Growth

+20.8% YoY

YoY Growth Rate

Steady EPS growth

R&D Spend

$83.5B/ year

↑ Rising (+18% vs prior year)

11.4% of revenue

In line with sector average (12%)

Investing heavily in future products and technology

Insider Activity

31.0%ownership

Insiders own a meaningful stake in the company

Cash Position

Cash flow positive

$1.4T cash & investments

Quarterly Free Cash Flow

→ Burn rate stable

Company generates more cash than it spends — no dilution risk from fundraising

Growth context

Tencent Holdings Limited is growing revenue at 8% year-over-year. The Winston Score measures business quality today — these growth metrics show what could matter tomorrow.

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

Every number that matters to educated investors.

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Quality

Gross Margin

54.6%

Healthy — 54.6% gross margin

Operating Margin

33.7%

Excellent — 33.7% operating margin

ROCE

4.3%

Weak — 4.3% return on capital

ROIC between 0% and 5%. They earn a few cents back per dollar invested in the business.

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Growth

Sales YoY

+12.0%

Steady sales growth (12.0% YoY)

EPS YoY

+17.7%

Earnings growing fast (17.7% YoY)

Healthy double-digit earnings growth — what compounders look like.

EPS Consistency

8/8 quarters

Every recent quarter grew earnings vs last year

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Cash Flow

Cash Conversion

140%

Turns 140% of profit into real cash

FCF Margin

29.7%

Converts sales into free cash efficiently (29.7%)

Free cash flow margin above 20%. Out of every $100 in sales, more than $20 is real cash they keep.

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Stability

Debt / Equity

0.35

Conservative — low debt load (0.35)

Interest Cover

17.92x

Comfortably covers interest (17.9x)

Interest coverage above 8. Profits cover interest many times over.

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Valuation

P/E Ratio (TTM)

2.0x

Attractive valuation — P/E 2.0

P/E under 10. The price tag is small relative to last year's profit.

P/E vs Forward

+0.7

GROWING

Earnings roughly flat

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Dividends

Dividend Yield

1.23%

Small dividend — 1.23% yield

Modest yield. The bulk of any return needs to come from price appreciation.

Dividend Growth

+187.7%

Dividend growing fast (187.7% YoY)

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