That's exactly the question explored in this month's Prestige Bulletin, which estimates Tencent to be trading at a 44% discount to its intrinsic value.
But here's the more important point...
What is intrinsic value?
It's not the share price you see on a screen.
It's an estimate of what a business may be worth based on the cash it could generate in the future.
And that's where many investors miss the opportunity.
While the market focuses on short-term news and price movements, long-term investors focus on business value.
Tencent is a fascinating example because it's far more than a social media company. Its ecosystem spans:
- Social platforms
- Digital payments
- Advertising
- Gaming
- Internet services
At the heart of it all sits WeChat, one of the most integrated digital ecosystems in the world.
The full October issue of Prestige Bulletin explains the Tencent valuation in detail and reveals the assumptions behind the analysis.
