TCTZF
Tencent Holdings Limited
$52.68
Platform & Compounding FCF
80%
Two-stage FCF DCF
Mild
·
Conviction
Fair Value
Trading 12.4% below fair value
You pay
$52.68
Bear
$46.58
Fair
$60.15
Bull
$73.03
Bear
$46.58
-11.6%
5% stage 1 growth, 11% discount
Fair
$60.15
+14.2%
9% stage 1 growth, 11% discount
Bull
$73.03
+38.6%
11% stage 1 growth, 11% discount
Adjust Assumptions
8.7%
11.0%
3.0%
Key Value Driver
FCF growth rate (9% base case)
Terminal Value % of EV
38%
Implied Market Multiple
17.2x
Market is pricing in (growth)
6.9%
vs 8.7% base
Summary
Using a two-stage FCF DCF with 9% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $60.15 per share.
Warnings
Financial statements were converted from CNY into USD using USDCNY at 0.1498 USD per CNY.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions