Financial Analysis And Valuation Of Tencent

Tencent is currently the world's leading Internet company and the benchmark for Chinese Internet companies.Tencent has a wide user base on a global scale and is the world's top 10 Internet company.Many product lines have an unassailable dominance in social and gaming fields,enabling it to have a huge traffic portal and Strong competitiveness.At the beginning of 2018,the market value exceeded $500 billion and exceeded FACEBOOK,becoming the most important technology stock in Hong Kong stocks.However,the subsequent multi-factors,especially the over-regulation of the game by domestic policies,caused Tencent's share price to continue to fall,and the market value even broke through 3 trillion Hong Kong dollars.At the same time,as the weighted stock of the Hang Seng Index,Tencent's share price fell once dragged down the Hang Seng Index.The fluctuations in stock prices have led to divergence in the valuation of Tencent's share price in the market,especially in terms of uncertain foreign investment returns,falling game revenues,and whether advertising and other businesses can maintain high growth rates.Based on the valuation theory and the application of the main methods,this paper introduces the development of valuation theory at home and abroad as well as the mainstream valuation methods and theories.Then I choose Tencent as the research object and analyze the basic situation of Tencent.Financial data,and a detailed financial analysis of Tencent,using the P/E ratio method and the free cash flow valuation model to estimate the value of Tencent's equity.Finally,in the valuation calculation for Tencent,there are deviations between the P/E ratio and the free cash flow valuation model.In general,there are many methods for valuation.The two methods selected in this paper have their rationality,but there are also Its limitations.In particular,both the P/E ratio and the free cash flow valuation model will be affected by Tencent's future expectations,which will be useful for the valuation of mature Internet companies such as Tencent.Help investors to make the right investment decisions.It is believed that with the development of society,the application of method tools is perfect,and the basic data is rich,the valuation model will be more scientific and reasonable,and more practical guiding significance.