Tencent Holdings Ltd TCEHYCOMMENTAug 31, 2017Stock price when the opinion was issued
As of May 28, 2026. Market Open.
Important, because it's the super-app for the Chinese consumer. Has a gaming platform, chat platform, and moving into the AI sphere. Interesting equity, but you need to make a call on China as a whole.
Remember what happened when the finance arm of BABA was supposed to go public: CEO said some things, Chinese government stepped in, Ant Financial was pulled, stock price of BABA collapsed by 70%, CEO disappeared for a few months. During that time, Tencent all of a sudden had to make a large donation to charity -- not something you can forecast. By investing in Tencent, you have to sign up for that.
Otherwise, a great company. Well managed, well structured, and they own the Chinese consumer.
This is one of her top holdings. A very well-run company. They have just under 1 billion monthly active users under CHAT. They are also the biggest gaming company. Between CHAT and gaming, that is 65% of their business. They are using their free cash flow to invest in other things, such as the Cloud. They are also the 2nd largest mobile payment company in China. Valuations are rich, at around 32X earnings, but she is expecting a compounded annual growth rate of earnings over the next 2-3 years of 35%. (See Top Picks.)