ZKH Group (NYSE:ZKH – Get Free Report) and Tencent (OTCMKTS:TCEHY – Get Free Report) are both computer and technology companies, but which is the better business? We will contrast the two companies based on the strength of their risk, analyst recommendations, earnings, institutional ownership, valuation, dividends and profitability.
Insider and Institutional Ownership
9.5% of ZKH Group shares are owned by institutional investors. Comparatively, 0.0% of Tencent shares are owned by institutional investors. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Profitability
This table compares ZKH Group and Tencent’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| ZKH Group | -1.54% | -4.64% | -2.19% |
| Tencent | 29.92% | 18.98% | 11.39% |
Analyst Recommendations
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| ZKH Group | 1 | 0 | 0 | 0 | 1.00 |
| Tencent | 0 | 2 | 2 | 0 | 2.50 |
Tencent has a consensus price target of $102.00, suggesting a potential upside of 66.67%. Given Tencent’s stronger consensus rating and higher probable upside, analysts plainly believe Tencent is more favorable than ZKH Group.
Risk & Volatility
ZKH Group has a beta of 0.49, meaning that its share price is 51% less volatile than the S&P 500. Comparatively, Tencent has a beta of 0.29, meaning that its share price is 71% less volatile than the S&P 500.
Earnings and Valuation
This table compares ZKH Group and Tencent”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| ZKH Group | $8.99 billion | 0.05 | -$19.98 million | ($0.13) | -23.62 |
| Tencent | $104.58 billion | 5.34 | $31.28 billion | $3.38 | 18.11 |
Tencent has higher revenue and earnings than ZKH Group. ZKH Group is trading at a lower price-to-earnings ratio than Tencent, indicating that it is currently the more affordable of the two stocks.
Summary
Tencent beats ZKH Group on 11 of the 13 factors compared between the two stocks.
About ZKH Group
ZKH Group Limited develops and operates a maintenance, repair, and operating (MRO) products trading and service platform that offers spare parts, chemicals, manufacturing parts, general consumables, and office supplies in the People’s Republic of China. The company provides MRO procurement and management services; digitalized MRO procurement solutions; and logistics and warehousing services. It also engages in the production and sale of intelligent warehousing equipment. ZKH Group Limited was founded in 1998 and is based in Shanghai, the People’s Republic of China.
About Tencent
Tencent Holdings Limited, an investment holding company, offers value-added services (VAS), online advertising, fintech, and business services in the People's Republic of China and internationally. It operates through VAS, Online Advertising, FinTech and Business Services, and Others segments. The company's consumers business provides communication and services, such as instant messaging and social network; digital content including online games, videos, live streaming, news, music, and literature; fintech services, which includes mobile payment, wealth management, loans, and securities trading; and various tools, such as network security management, browser, navigation, application management, email, etc. Its enterprise business comprises marketing solutions, which offers digital tools including user insight, creative management, placement strategy, and digital assets management; and cloud services, such as cloud computing, big data analytics, artificial intelligence, Internet of Things, security and other technologies for financial services, education, healthcare, retail, industry, transport, energy, and radio & television application. In addition, the company operates innovation business, which includes artificial intelligences; and discover and develops enterprise and next-generation technologies for food production, energy, and water management application. Tencent Holdings Limited was formerly known as Tencent (BVI) Limited and changed its name to Tencent Holding Limited in February 2004. The company was founded in 1998 and is headquartered in Shenzhen, the People's Republic of China.
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