Tencent Holdings Limited

TCEHY

Internet Content & Information · Communication Services

Price

$59.19

-2.08 (-3.39%)

Market Cap

$533.39B

Exchange

Other OTC

Winston Score

Winston is curious

A decent business — some strong pillars, some weaker.

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 company that runs some of the most widely used apps in China. Its biggest products are WeChat, a super-app used for messaging, payments, and shopping by over a billion people, and a large collection of video games including titles like Honor of Kings and PUBG Mobile. Tencent also owns stakes in hundreds of other companies, including major gaming firms like Riot Games and Epic Games.

Tencent makes money through several streams: selling in-game items and subscriptions in games, charging fees on WeChat Pay transactions, selling digital advertising, and collecting revenue from its video streaming and music platforms. The company operates mainly in China but has a growing international gaming presence through its investments. Its massive user base and the deep integration of WeChat into daily Chinese life give it a strong competitive position, though ongoing regulatory pressure from the Chinese government remains a significant risk to its business.

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

+8.5% YoY

YoY Growth Rate

Slow revenue growth

EPS Growth

+21.9% YoY

YoY Growth Rate

Steady EPS growth

R&D Spend

$83.4B/ 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

0.0%ownership

Relatively low insider ownership

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

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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

+12.1%

Fast-growing sales (12.1% YoY)

EPS YoY

+18.7%

Earnings growing fast (18.7% 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

29.6%

Converts sales into free cash efficiently (29.6%)

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

17.93x

Comfortably covers interest (17.9x)

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

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Valuation

P/E Ratio (TTM)

2.3x

Attractive valuation — P/E 2.3

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

1.15%

Small dividend — 1.15% yield

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

Dividend Growth

-40.6%

Dividend cut (-40.6% YoY) — warning sign

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