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Why Tencent is the Only Chinese Tech Giant You Should Own

Why Tencent is the Only Chinese Tech Giant You Should Own

Introduction to Tencent

Tencent (OTCPK:TCEHY) (OTCPK:TCTZF) stands as a vital beacon in the stormy seas of Chinese investments. It’s a gem sparkling amidst tumultuous turmoil, offering strong growth, rich margins, and management built on a solid bedrock of determination and wisdom. Currently, Tencent’s valuation lies at its lowest in over a decade, making it a golden opportunity. The best way to gain indirect access to Tencent is through Prosus, a discounted holding primarily invested in the tech juggernaut.

Meet The Tech Connoisseur

Tencent, headquartered in Shenzhen, China, is an entertainment and tech conglomerate and among the world’s largest tech companies by market cap. It’s a veritable juggernaut, dominating the fields of social media, video games, fintech, cloud computing, and artificial intelligence products and services in China. The company’s core products envelop popular social media platforms, blockbuster video games, groundbreaking fintech services, and trailblazing artificial intelligence solutions.

Triumph Amidst Turmoil

A look at Tencent’s quarterly revenue per business segment reveals the colossal scale of this mammoth enterprise. Despite revenue growth slowing down recently, Tencent’s business evolution remains remarkably resilient, with its social media and gaming divisions providing a firm income foundation. Despite economic slowdown, increased regulatory scrutiny, and heightened competition, Tencent is diversifying into new growth areas such as cloud computing and artificial intelligence to navigate the choppy seas.

Light in the Dark: Valuation and Prosus Holding

Tencent’s valuation sits significantly lower than its historical averages, rattled by a post-COVID downturn, CCP’s crackdown on tech companies, and US trade restrictions. However, those who steadfastly believe in Tencent’s potential for monumental growth in its core markets would find its current valuation a steal. The seeking Alpha Quant rating echoes this sentiment, backing Tencent as a “Strong Buy” based on profitability and revisions.

For investors seeking deep-value opportunities, Prosus Holding (OTCPK:PROSY) offers a unique gateway to Tencent. Prosus, a multinational technology investment group based in Amsterdam, Netherlands, and listed on the Euronext Amsterdam stock exchange, presents an intriguing prospect. With a portfolio predominantly comprised of Tencent shares, Prosus is heavily influenced by Tencent’s price movements, wading through ebbs and flows to offer investors a discounted glimpse into the expansive prowess of Tencent.

For investors braving the tempestuous waters of Chinese tech investments, Tencent through Prosus remains a beacon of hope, offering a captivating narrative of resilience and opportunity amidst tumultuous times.