Tencent Holdings Ltd (TCEHY)

(A Top Pick Apr 23/18, Down 10%) It got creamed in the recent Chinese market take-down. Company fundamentals are good. A real growth company. Partially held back by Chinese regulators and caught in the US-China tariff war. He will add to his position, and will wait to see how things transpire. Owns this and Alibaba among Chinese stocks. Remember that each year, China adds the entire population of Canada to their middle class. Enormous growth.

Was a flyer, now caught in negative sentiment surrounding Chinese names. Long-term, a great company. Dominate social media space and gaming. Net revenue growth slowed to 30%, and seeing some weakness in profits. Concerns about US-China relations and regulatory approvals. He’s watching it very closely. Use a stop loss.

They've had some challenges. Longtime shareholders have done well. Tariff fears and high multiples have led to a nasty contraction. That said, the longterm outlook is good. Keep watching it, but the sell-off isn't over yet.

(A top pick June 29/18, down 9%). Year to date it is down pretty hard. They had a horrible quarter, however, they still had a $3B profit. They have a good business model.

Traffic congestion in China is severe, making online delivery very attractive. As China gets wealthier, this business will increase. However, funds are starting to fly out of emerging markets and to come out of high technology stocks. There could be a meaningful correction in the price of this stock, so even though it will do well over the long term, it might be best to take some money off the table for now. He sees this as a high-quality stock and will be interested when its valuation looks cheaper.

The Chinese market has been “smoked” this year. This company is in the right sector right now and is a leader in the internet space. It is an out-performer.

(Past Top Pick, June 1, 2018, Down 2%) A mega-cap company in online advertising and gaming (gambling) from China. A giant company and a core holding for him.

(Past Top Pick, June 29, 2017, Up 38%) They dominate China's social network, where mobile videogaming is very big--and Tencent has a stake in that. They also have a Messenger-type app with over a billion users. The runway for growth is long.

Everything is going right for this company – it owns much of the platform for digital sales in Asia, whereas in North America it is fragmented between Amazon, Google and Facebook. This is a service company that will not be impacted by tariff wars. Yield 0.2%. (Analysts’ price target is $520.92 HKD)

He has a 12 month target of $65. It has a Price Earnings to Growth ratio of only 0.63 making it relatively cheap. It is largest market cap in China. It is involved in social networks, online games and cloud services. The growth of these sectors is huge in China. Yield 0.2%. (Analysts’ price target is $65)

They have done a terrific job at growing their business. Highly innovative. His concern is that you really don’t know what you own. You have to be careful about the rule of law.

Owns WeChat which is the leading social media app in China. It is the first place a company establishes their web presence there. He considers they are undergoing a bit of a breather.

Large owner of Epic Games. One of the top five internet companies in the world. Market cap is $492 billion. Last week the company beat earnings expectations. Over 1 billion active users. Fascinating growth story. Earnings Growth is forecasted to be 25 to 30%. (Analysts’ price target is $73.50)

WeChat has nearly a billion users. They pay a little dividend. Companies that pay dividends always outperform. It shows the cash flow is there. This is a play on Internet and gaming. He likes it.

This company is an aggregator of social media for China. It is a very good business, but he struggles with the valuation being so stretched. There is not a great chance it will double in value in a reasonable amount of time. There are better opportunities to get Asian exposure like China Mobile.