Tencent Holdings: The Wide-Moat Chinese Internet Firm

Max Hu presented his in-depth investment thesis on Tencent Holdings (HK: 700) at Asian Investing Summit 2016.

Tencent Holdings ranks among the largest Internet companies, operating the largest social networks (Wechat and QQ) in China without any competitors in sight. Even though it is already the largest public company in the Hong Kong market, it remains capable of growing earnings at a CAGR of 30-40% over the next five to ten years, thanks to acceleration in the monetization of its near-monopoly in social networks, not only via gaming and member service fees, but also in video, adverting, and payments. While seemingly expensive compared to many other Hong Kong stocks, and while patient investors may yet have a better entry point, Max views Tencent as one of best long-term growth plays in the Greater China region amid growing uncertainty about the regional macroeconomic outlook.

About the instructor:

Max Hu serves as portfolio manager at Tyee Capital Group, a leading asset management platform with offices across Hong Kong, Beijing, Shanghai, and Shenzhen. Previously, Max was the founder and portfolio manager of Tempus Capital Limited, a Hong Kong based investment firm. Max’s investment approach is contrarian, value-driven and focused. His investments have been focused on easy to understand, wide-moat businesses with solid long-term growth prospects. He has worked at Deutsche Asset Management and is a CFA Charterholder. Max graduated from Tsinghua University in China, with a degree in physics and mathematics. He has done PhD research in Financial Economics at ETH Zurich and holds a Masters’ degree from University Heidelberg.

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