Tencent Holdings Limited : Expect the comeback of a strong trend

04/22/2020 | 08:46am EST

David Meurisse

long trade Target price hit

Entry price : 400HKD | Target : 477HKD | Stop-loss : 369.7HKD | Potential : 19.25%

After accumulation, acceleration. Timing appears favorable to go long in shares of Tencent Holdings Limited and to anticipate an exit of the trading range on the upside. Investors have an opportunity to buy the stock and target the HKD 477.

Summary

• The company has strong fundamentals. More than 70% of listed companies have a lower mix of growth, profitability, debt and visibility criteria.

Strengths

• Analysts expect a sharply increasing business volume for the group, with high growth rates in the coming years.
• Margins returned by the company are among the highest on the stock exchange list. Its core activity clears big profits.
• Thanks to a sound financial situation, the firm has significant leeway for investment.
• Analysts covering this company mostly recommend stock overweighting or purchase.

Weaknesses

• The share is close to its long-term resistance in weekly data. Therefore, the potential should be limited. However, a further bullish movement when crossing this resistance will be a positive signal.
• The stock is currently in contact with a medium-term resistance that must be gotten rid of so as to resume the upward trend.
• The company's "enterprise value to sales" ratio is among the highest in the world.
• With an expected P/E ratio at 37.01 and 29.82 respectively for both the current and next fiscal years, the company operates with high earnings multiples.
• The firm pays small or no dividend to shareholders. For that reason, it is not a yield company.
• For the last twelve months, sales expectations have been significantly downgraded, which means that less important sales volumes are expected for the current fiscal year over the previous period.

© MarketScreener.com 2020

	Stocks mentioned in the article	Change	Last		1st jan.
	AMP LIMITED	-0.95%	1.565		0.32%
	AT HOME GROUP INC.	-2.95%	22.73		47.02%
	BYD COMPANY LIMITED	-1.29%	245.8		20.96%
	JUST GROUP PLC	-1.20%	79.5282		14.45%
	LETS HOLDINGS GROUP CO., LTD.	1.58%	7.72		-0.77%
	LOOK HOLDINGS INCORPORATED	-1.07%	921		-3.76%
	TENCENT HOLDINGS LIMITED	2.46%	645		14.36%
	THE NEW HOME COMPANY INC.	-1.28%	5.38		14.71%
	WILL GROUP, INC.	-0.81%	976		-2.98%
	WORLD CO., LTD.	-1.33%	1258		0.40%

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