700 HK

Tencent Holdings Ltd

TMT


Presented:08/04/2015
Price:HK$142.40
Cap:$172.33B
Current Price:HK$417.00
Cap:$494.53B

Presented

Date08/04/2015
PriceHK$142.40
Market Cap$172.33B
Ent Value$172.88B
P/E Ratio43.6x
Book ValueHK$11.77
Div Yield0.32%
Shares O/S9,385.00M
Ave Daily Vol18,933,209
Short IntN/A

Current

PriceHK$417.00
Market Cap$494.53B
Tencent Holdings Ltd. is engaged in the provision of internet, mobile, and telecommunication services. It operates through the following business groups: Corporate Development, Interactive Entertainment, Mobile Internet, Online Media, Social Network, and Technology and Engineering. The company was founded by Yi Dan Chen, Hua Teng Ma, Chen Ye Xu, Li Qing Zeng, and Zhi Dong Zhang on November 23, 1999 and is headquartered in Shenzhen, China.

Publicly traded companies mentioned herein: JTencent Holdings (700 HK), PayPal (PYPL), Facebook (FB), Twitter (TWTR) and Yelp (YELP).

Highlights

Temporarily setting aside the value of the company’s core business, the presenter’s long thesis on Tencent principally focuses on the value of the company’s “best in class” minority stakes in various leading public and private China Internet companies. With the stock currently at HKD $140, the presenter believes the market presently is ascribing zero value to these stakes, but a recent valuation of the holdings in question suggests that as much as an additional HKD $20 in per share value - approximately HKD $16 in public and private stakes and HKD $3 in cash - could accrue to shares. Further, the presenter believes that Tencent’s payment asset, Tenpay, is also being meaningfully undervalued by investors, potentially constituting an additional HKD $30 of per share value. The core business is expected to earn HKD $6 in EPS in 2016; backing out the value of these assets, investors are therefore currently paying only 15 times earnings for the company’s core business, or about HKD $90 per share. 

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