Tencent Holdings Limited

TCEHY

Internet Content & Information · Communication Services

Exchange

Other OTC

Winston Score

Winston is happy

A high-quality business with solid fundamentals.

Data as of Aug 23, 2026 · filings through Jun 30, 2026

How the score breaks down

Quality

Strong

Growth

Strong

Cash Flow

Exceptional

Stability

Exceptional

Valuation

Strong

Dividends

Weak

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Winston Score History

The full picture

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.

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

+10.7% YoY

YoY Growth Rate

Steady revenue growth

EPS Growth

+1.0% YoY

YoY Growth Rate

Slow EPS growth

Insider Activity

0.0%ownership

→ Flat

Insider ownership roughly steady over the past year

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 + cash flow

Tencent Holdings Limited is a rare growth stock that's already generating positive cash flow while growing at 11%. The Winston Score doesn't fully credit this transition from "burner" to "earner."

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

Profit per sale

Gross Margin

57.8%

Premium pricing power — 57.8% gross margin

Profit after running costs

Operating Margin

33.1%

Excellent — 33.1% operating margin

Return on the money invested

ROCE

15.9%

Strong — 15.9% return on capital

ROIC between 15% and 25%. Every dollar invested in the business earns 15 to 25 cents back per year.

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Growth

Sales growth

Sales YoY

+11.2%

Steady sales growth (+11.2% YoY)

Profit growth

EPS YoY

+13.7%

Earnings growing (+13.7% YoY)

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

How steady the profit is

EPS Consistency

8/8 quarters

Every recent quarter grew earnings vs last year

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Cash Flow

Profit that turns into cash

Cash Conversion

140%

Turns 140% of profit into real cash

Spare cash per sale

FCF Margin

28.9%

Converts sales into free cash efficiently (28.9%)

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

What it owes vs what it owns

Debt / Equity

0.40

Conservative — low debt load (0.40)

Covers its interest

Interest Cover

19.27x

Comfortably covers interest (19.3x)

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

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Valuation

Price vs profit

P/E Ratio (TTM)

15.0x

no trend

Attractive valuation — P/E 15.0

P/E in the normal range. Price is roughly $15 for every $1 of yearly profit.

Cheaper or dearer next year

P/E vs Forward

+4.5

GROWING

Earnings expected to grow meaningfully — cheaper on forward P/E (15.0 → 10.4)

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Dividends

Dividend

Dividend Yield

1.10%

no trend

Small dividend — 1.10% yield

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

Dividend record

Dividend Growth

-40.6%

no trend

Dividend cut (-40.6% YoY) — warning sign

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