Investment Thesis – Tencent (0700)

  • Tencent’s online gaming dominance is likely to continue. Given that majority of their gaming revenues are coming from mobile games, the current video games trend of shifting from PC to mobile is beneficial for Tencent’s growth. VR gaming may pose a threat to Tencent’s revenues in future.
  • Tencent’s dominance over social media (Wechat & QQ) in China provides high potential for its growth. With Monthly Average Users (MAU) gradually on the rise, there is high potential for Tencent to expand the platforms’ profitability. One such example was the highly successful Wechat Pay, which is a feature integrated into Wechat.
  • Tencent’s focus on synergising the digital content together is great for building up its consumer base. Increasing the dependency of consumers on Tencent’s products is great for business.
  • Tencent invests in technology to stay relevant. Cloud technology, computer learning, and AI are examples of this.

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