This Chinese tech giant which owns the likes of WeChat has been hammered over 60% very much shadowing Alibaba, the company’s also the world largest video game publisher and China’s 3rd largest cloud infrastructure platform i.e. it’s operating in all the right areas but China’s been a worry. The company now has to deal with unpredictable fines and restrictions on M&A but like most things, this is likely to be cyclical, especially when China decides to attract investment and showcase its strong companies.
We believe Tencent is now cheap trading on 21.4x 2022 Est earnings but we believe it will be a while before we see valuation expansion as we did in 2020-22.
MM is bullish Tencent under $US400
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