TCTZF
Tencent Holdings Limited
$55.31
Platform & Compounding FCF
80%
Two-stage FCF DCF
Mild
·
Conviction
Fair Value
Trading 7.6% below fair value
You pay
$55.31
Bear
$46.34
Fair
$59.84
Bull
$72.65
Bear
$46.34
-16.2%
5% stage 1 growth, 11% discount
Fair
$59.84
+8.2%
9% stage 1 growth, 11% discount
Bull
$72.65
+31.4%
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
18.1x
Market is pricing in (growth)
7.7%
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 $59.84 per share.
Warnings
Financial statements were converted from CNY into USD using USDCNY at 0.1490 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