Comprehensive Analysis of Tencent Holdings (0700.HK) Long-Term Investment Value

Based on the latest data analysis, I will comprehensively evaluate the long-term investment value of Tencent Holdings at its current valuation level from multiple dimensions.

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As of December 30, 2025, Tencent Holdings closed at

, with a year-to-date increase of [0]. From a valuation perspective:

Valuation Indicator	Value	Analysis
P/E Ratio	24.37x	Reasonable range relative to history
P/B Ratio	3.82x	Reflects market recognition of asset premium
Market Capitalization	5.44 trillion Hong Kong dollars	Remains the leading tech stock in Hong Kong
52-Week Range	364.80-683.00 Hong Kong dollars	Currently in the upper-middle part of the range

According to DCF model analysis[0]:

• Conservative Scenario
  : 500.45 Hong Kong dollars (-16.5%)
• Base Scenario
  : 635.79 Hong Kong dollars (+6.1%)
• Optimistic Scenario
  : 994.64 Hong Kong dollars (+66.1%)
• Probability-Weighted Value
  : 710.29 Hong Kong dollars (+18.6% upside potential)

From historical average data[0], Tencent’s 5-year average revenue growth rate is , and EBITDA margin is , which provide strong support for the current valuation.

Technical analysis shows[0] that Tencent is currently in a

, with a trading range of and a Beta value of 0.85, indicating lower volatility than the Hang Seng Index, suitable for conservative investors.

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According to the latest financial report information[1], Tencent’s domestic game revenue reached

, a year-on-year increase of , far exceeding the market expectation of 17%. Long-standing games like Honor of Kings and PUBG Mobile hit new highs in revenue during the traditional peak season, showing strong resilience in their life cycles.

Network search information shows[1] that Tencent is actively promoting its game overseas strategy. With the great success of domestic games like Black Myth: Wukong overseas, it proves that Chinese games have global competitiveness. As an industry leader, Tencent’s layout in overseas markets will bring a second growth curve.

The game industry is undergoing an AI technology revolution[1]. Advances in AI technology are helping game companies:

• Reduce R&D costs
  : AI-assisted development accelerates the game production process
• Improve operational efficiency
  : Intelligent operations increase user retention and ARPU value
• Innovate gameplay
  : Integration of AI and games creates new gaming experiences

From a macro perspective[1], the game industry is in an upward cycle of sentiment in 2025:

• Improved policy environment, with regulatory pressure gradually easing
• Concentrated launch of new products, improving supply side
• Accelerated overseas expansion, opening up market space
• Low allocation ratio in the industrial chain, with room for capital inflow

: Tencent’s game business has a strong diversified product matrix, long-standing games continue to contribute stable cash flow, new games and overseas markets provide increments, AI technology enables cost reduction and efficiency improvement, so the longevity capability of the game business is trustworthy.

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WeChat Channels is Tencent’s core layout in the short video field, relying on the huge ecosystem of WeChat’s 1.3 billion monthly active users, with natural traffic advantages. In 2025, WeChat Channels is accelerating its commercialization process.

The monetization channels of WeChat Channels mainly include:

Monetization Mode	Progress	Potential Evaluation
Ad Monetization	Native ads and brand partnerships continue to grow	★★★★☆
E-commerce Live Streaming	WeChat Channels Store and Mini Program e-commerce are connected	★★★★★
Live Streaming Rewards	Virtual gifts and creator sharing	★★★☆☆
Paid Content	Knowledge payment and member content	★★★☆☆

Compared with Douyin and Kuaishou, WeChat Channels’ advantages lie in:

• Social relationship chain
  : Trust-based recommendations from WeChat friends
• Private domain traffic
  : Closed loop from public domain traffic to private domain沉淀
• Commercial closed loop
  : Seamless connection of Mini Programs, payment, and WeChat Work

According to Deloitte’s 2025 Digital Media Trends Report[2], video entertainment is being profoundly reshaped by social platforms and user-generated content, which provides macro support for the long-term development of WeChat Channels.

Although specific financial data is limited, from Tencent’s overall revenue structure, online advertising business is growing rapidly. With the deepening of WeChat Channels’ commercialization, it is expected to become an important revenue growth point in the next 2-3 years, with a conservative estimate of bringing

to Tencent.

: WeChat Channels has natural advantages of “social + content + e-commerce” and great monetization potential, but it is still in the investment phase, so continuous attention to commercialization progress is needed.

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Tencent announced the comprehensive restructuring of the Hunyuan Large Model system, establishing the “Large Language Model Department” and “Multimodal Model Department”, implementing the “Dual-Engine AI Strategy” to actively respond to challenges from open-source models like DeepSeek[3]. This strategic layout reflects Tencent’s determination in the AI field.

Tencent’s AI capabilities are deeply empowering various business lines:

Business Segment	AI Application Scenario	Value Creation
Game	AI-assisted development, intelligent operation	Reduce costs, improve experience
Social	Intelligent recommendation, content review	Increase user stickiness, reduce compliance risks
Financial Technology	Risk control, anti-fraud	Reduce risk losses
Cloud Service	AI computing power, enterprise-level AI services	New growth point

Tencent President Liu Chiping said at the analyst meeting that AI chip supply is one of the factors limiting the growth of cloud business[3]. This indicates that Tencent is investing heavily in AI infrastructure construction, but also faces supply chain bottlenecks. However, with the expansion of global AI chip production capacity, this problem is expected to gradually ease.

The long-term value of AI to Tencent is reflected in:

• Cost reduction and efficiency improvement
  : AI improves operational efficiency and profit margins
• Product innovation
  : AI spawns new product forms and business models
• Ecological moat
  : AI technology deepens the synergy between various business lines

: Tencent’s AI layout has long-term strategic value. Although it is difficult to directly contribute significant revenue in the short term, it will provide continuous technical empowerment for various business lines.

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According to financial analysis[0], Tencent shows excellent financial quality:

Financial Indicator	Value	Evaluation
ROE	20.29%	Excellent shareholder return capability
Net Profit Margin	29.93%	Industry-leading level
Operating Profit Margin	31.84%	Strong profitability
Current Ratio	1.36	Healthy liquidity
Financial Attitude	Conservative	Prudent accounting policy

Free cash flow in 2024 reached

[0], and abundant cash flow provides guarantees for:

• Sustained R&D investment
• Creating conditions for shareholder returns (repurchase + dividend)
• Providing ammunition for strategic investment and mergers and acquisitions

Main risks include:

• Regulatory risk
  : Policy uncertainty such as antitrust and data privacy
• Competition risk
  : Facing strong opponents like NetEase and Mihoyo in the game field
• Macro risk
  : Slowdown in China’s economic growth affects advertising and payment businesses
• Geopolitical risk
  : Sino-US relations affect overseas business expansion

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Based on multi-dimensional analysis:

Evaluation Dimension	Score	Weight	Weighted Score
Valuation Level	★★★★☆	25%	1.00
Longevity Capability of Game Business	★★★★★	30%	1.50
Monetization Potential of WeChat Channels	★★★★☆	20%	0.80
Long-Term Value of AI Layout	★★★★☆	15%	0.60
Financial Health	★★★★★	10%	0.50
Comprehensive Score	-	100%	4.40/5.00

1. Long-Term Holders
   : Around 600 Hong Kong dollars has strong safety margin, consider batch position building
2. Value Investors
   : Current valuation is in a reasonable range, DCF base scenario provides 6% upside potential[0]
3. Growth Investors
   : Pay attention to WeChat Channels’ monetization and AI commercialization progress, optimistic scenario provides 66% upside potential[0]
4. Risk Management
   : It is recommended to adopt the “Barbell Strategy Allocation”[4], and configure defensive assets to hedge risks at the same time

Future focus should be on:

• Growth trends of domestic and overseas revenue in the game business
• MAU, duration, and monetization efficiency of WeChat Channels
• Actual application effects of AI technology in business
• Changes in regulatory policies
• Impact of macroeconomic environment on advertising and payment businesses

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Tencent Holdings

in the valuation range of 600-750 Hong Kong dollars. The longevity capability of the game business has been fully verified, WeChat Channels has great monetization potential but still needs time to verify, and AI layout has long-term strategic value. Considering the company’s strong financial strength, diversified business structure, and continuous innovation capability, Tencent is still one of the most worthy long-term allocation tech leaders in the Hong Kong stock market.

For investors who are truly willing to hold long-term, the current valuation level provides a good risk-reward ratio. However, investors need to be prepared: Tencent has entered a steady growth period from the high-growth period, and will more reflect the characteristics of “value growth stock” rather than “growth stock” in the future.

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[0] Jinling API Data - Tencent Holdings (0700.HK) Market Data, Financial Analysis, DCF Valuation, Technical Analysis

[1] Yahoo Hong Kong Finance - “Game Industry Sentiment Gradually Improves, Can It Boost Related Companies?” (https://hk.finance.yahoo.com/news/遊戲產業景氣逐步提升-可吼心動公司-022230191.html)

[2] Yahoo Hong Kong Finance - “Tencent’s Quarterly Results Beat Expectations, Domestic Game Revenue Grows Strongly” (https://hk.finance.yahoo.com/news/科技業-騰訊季績勝預期-內地遊戲收入增長勪調ai產生實質貢獻-093000981.html)

[3] Yahoo Hong Kong Finance - “Tencent Invests Heavily in AI! Comprehensive Restructuring of Hunyuan Large Model” (https://hk.finance.yahoo.com/news/騰訊大舉投入ai-混元大模型全面重構-雙引擎戰略迎戰開源挑戰-040002131.html)

[4] Yahoo Hong Kong Finance - “Hong Kong Stocks Boom This Year” (https://hk.finance.yahoo.com/news/港股大年-10倍股札堆-380隻翻倍股-最高漢幅近33倍-122004354.html)

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