Tencent Music Entertainment Group
NYSE:TME

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Tencent Music Entertainment Group
NYSE:TME
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Price: 11.63 USD -2.68%
Market Cap: 19.7B USD
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DCF Value

This DCF valuation model was created by Alpha Spread and was last updated on Dec 23, 2024.

Estimated DCF Value of one TME stock is 13.2 USD. Compared to the current market price of 11.63 USD, the stock is Undervalued by 12%.

TME DCF Value
Base Case
13.2 USD
Undervaluation 12%
DCF Value
Price
Worst Case
Base Case
Best Case
13.2
DCF Value
Worst Case
Base Case
Best Case
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DCF Value: 13.2 USD

Present Value Calculation

This block is the starting point of the DCF valuation process. It calculates the present value of a company's forecasted cash flows based on selected operating model. Adjust key parameters like discount rate and terminal growth, and alter inputs such as revenue growth and margins to see their impact on valuation.

DCF Model
Base Case Scenario

The present value of cash flows over the next 5 years amounts to 40.2B CNY. The present value of the terminal value is 108.7B CNY. The total present value equals 148.9B CNY.
Forecast Period
Years
Discount Rate
%
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Terminal Growth
%
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DCF Value Calculation

This stage translates the present value into DCF value per share. For firm valuation models, it adjusts present value for debt and assets to derive equity value (skipped if using equity valuation model). Finally, this equity value is divided by the number of shares to determine the DCF value per share.

Present Value to DCF Value
Capital Structure

Present Value 148.9B CNY
+ Investments 21.1B CNY
Firm Value 170B CNY
- Debt 5.9B CNY
- Minority Interest 1.3B CNY
Equity Value 162.7B CNY
/ Shares Outstanding 1.7B
Value per Share 96.31 CNY
CNY / USD Exchange Rate 0.1371
TME DCF Value 13.2 USD
Undervalued by 12%

Valuation Analysis

Sensitivity Analysis
DCF Value Sensitivity Analysis

Sensitivity Analysis assesses how changes in key factors like revenue growth, margin, and discount rate affect a stock's DCF value. By visualizing various scenarios, from significant downturns to optimistic growth, this tool helps you understand potential valuation shifts, aiding in risk assessment and strategic decision-making.

DCF Financials
Financials used in DCF Calculation

Revenue
30.7B 45.3B
Operating Income
8.7B 14.5B
FCFF
8B 11.8B

See Also

Discover More

What is the DCF value of one TME stock?

Estimated DCF Value of one TME stock is 13.2 USD. Compared to the current market price of 11.63 USD, the stock is Undervalued by 12%.

The true DCF Value lies somewhere between the worst-case and best-case scenario values. This is because the future is not predetermined, and the stock's DCF Value is based almost entirely on the future of the company. Knowing the full range of possible stock DCF values gives a complete picture of the investment risks and opportunities.

How was the DCF Value calculated?

1. Present Value Calculation. Utilizing the DCF operating model, Tencent Music Entertainment Group's future cash flows are projected and then discounted using a chosen discount rate to determine its Present Value, which is calculated at 148.9B CNY.

2. DCF Value Calculation. The company's capital structure is employed to derive the total Equity Value from the previously calculated Present Value of the cash flow. This Equity Value, when divided by the total number of outstanding shares, yields the DCF Value of 13.2 USD per share.

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