The Chinese multinational holding company is one of the most valuable Chinese companies and a T0P 3 brand of the Asian Brands of Twenties chart by Alpho. As a technology company its shares experienced a relatively turbulent last 12 months. During the most of 2023 Tencent market capitalization declined. Only a month ago right after the 1st quarter results announcement Tencent shares started to grow again. But anyway, this development seems to be just temporary.

The history of Tencent Group has been written since 1998. Although it is headquartered in Shenzen (China), the stocks are listed on the Hong Kong Stock Exchange. Tencent focuses on the information technology, software or artificial intelligence. It also owns social media such as Tencent QQ or WeChat and is involved in the gaming industry or FinTech.

The Tencent Group´s 2023 revenues reached 86 billion USD which was up by 10 percent over 2022. It was also 4,2 times more than just two years ago, according to the Tencent annual reports. The operating profit increased by 34 percent in 2023 on the year-on-year basis, and net profit attributable to the equity holders grew by 36 percent and reached 22.3 billion USD.

“In 2023, we achieved breakthroughs in a number of products and services, as Video Accounts’ total user time spent more than doubled, enhancements to our advertising AI model significantly improved our targeting performance, and international contribution to our games revenue reached a record 30 %,” Ma Huateng, Chairman and CEO of Tencent said during the financial results announcement.

Tencent Group has already released the results for the first quarter of 2024. It seems that the company was continuing the trend form the end of 2023. Tencent increased its revenues by 6 percent in comparison to the same quarter of 2023. The revenues reached 22.5 billion USD. Operating profit grew by 30 percent on the year-on-year basis, and the profit attributable to equity holders grew by 54 percent (reached 7.1 billion USD).

These results probably stimulated the investors´ demand for Tencent shares. Their value increased by one fifth since the middle of May, which is not far from the year-to-date change (+21.31 percent). Over the last 12 months Tencent shares rose only by 6.39 percent because they experienced more or less constant decline during the most of 2023.

When we look at the development of the market capitalization of Tencent Group over the last five years we can se quite variable evolution. Tencent stocks are today only 14.75 percent higher than 5 yeas ago. But it is not the full story.

Tencent shares grew quite rapidly since the covid pandemic outbreak. Only during 2020 market value of Tencent grew by more than 45 percent. It peaked at the beginning of the first decade of February 2021 at the level near 720 HKD (97.6 percent higher than in the start of 2020). Since then, the stock experienced decreasing trend.

Tencent stocks hit the bottom at the end of October 2023, then they recorded a rebound which continued to the end of 2023. After that Tencent stocks started to decline again, as we already said in the paragraphs above. Today it seems that the Tencent stocks are looking for the clear direction of their future development.

Tencent Group shares over the last five years

Source: Google.com

Written by Oleh Shalenyk, Analyst of Alpho