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Buy Tencent For Its Investment Portfolio

Apr. 01, 2021 3:34 PM ETTencent Holdings Limited (TCEHY)52 Comments
Nick Cox profile picture
Nick Cox


  • The huge value of Tencent's Investment Portfolio may be under-appreciated by analysts.
  • Overseas investments reduce the risk of potentially negative political moves within China.
  • The company has tremendous resources to continue and build on its investment portfolio.
  • Recent results emphasize the company's growth and profitability.

Tencent (OTCPK:TCEHY) is a vast and extremely diverse conglomerate which cannot be explained in a single article. For full details of what the company does, readers can refer to my article in November last year and the links in that.

This article focuses in particular on Tencent's international growth. It has become almost a corporate exemplar of the government's "Belt & Road" initiative.

Put simply, Tencent's rise to being one of the largest companies in the world has been built on its user base of WeChat and WeChatPay users in China. This is similar to Apple (NASDSQ:AAPL) with its iPhone base and Sony (NYSE:SNE) with its PS base.

There are impediments to future growth in China. The company may have become somewhat a victim of its own success. The problems Alibaba (NASDAQ:BABA) is having following comments by its founder Jack Ma show the dangers of becoming too powerful within the realm of the Chinese Communist Party (CCP). There are anti-trust moves afoot throughout the Chinese economy. It seems likely Tencent's founder and chairman Pony Ma will be able to avoid much damage from "friendly fire".

Meanwhile the wide-ranging, profitable and growing investment portfolio of the company overseas may be its best route to future growth and profitability. It is one the CCP will probably be happy to encourage. Much of Tencent's investment is around Asia. Asian countries have 32.3% of world GDP as I outlined here. This is likely to increase as Asian countries grow more rapidly than those elsewhere and as their populations in general are growing.

For those investors tempted by finding investing gems in SPAC's, I think Tencent is a far better bet.

Tencent Stock Price

The stock price has stood up well to the general sell-off in tech stocks. This follows an approximate 50% gain in 2020. The one

This article was written by

Nick Cox profile picture
Nick Cox is a long-time entrepreneur and investor,currently living in Singapore.He has lived and worked in the Asia-Pacifci region for many years.He is a graduate in modern history and economics from University College,London University. His investment strategy is centred around finding long-term growth companies in the region based on inspiring Management and businesses at the cutting edge of new growth areas. Asia is the leading driver of worldwide economic growth today and for the medium term.

Analyst’s Disclosure: I am/we are long TCEHY AAPL SE SNE. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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