For some time now, I've been thinking about diversifying my investment portfolioby partially exiting the US market. Although US tech companies have experienced spectacular growth, I now consider that the US market has become very expensivewith valuations sometimes disconnected from fundamentals.
On the other hand the Chinese market seems to me to be undervalueddespite its immense technological potential. China is investing massively in forward-looking sectors such as artificial intelligencesemiconductors and digital infrastructures. It was against this backdrop that I became interested in Tencent Holdings Limited $TCEHY (-0,45%) a Chinese technology giant playing a central role in this transformation.
Tencent is much more than just a video game publisher or the owner of WeChat. It's a company that :
- Generates billions of RMB in free cash flow every year
- Invests in advanced artificial intelligence models such as Hunyuan-T1
- Integrates AI into its products to enhance the user experience
- Expands internationally, while remaining firmly rooted in the Chinese ecosystem
In the following sections, I'll be presenting Tencent's financial performance, its AI initiativesinitiatives, and why I think this is a company to watch closely for any investor seeking exposure to Chinese growth.
Tencent's solid growth in the first half of 2025:
- Q2 2025 sales CNY 184.5 billion (+15% YoY)
- Net income Q2 2025 CNY 55.6 billion (+17% YoY)
- S1 2025 sales CNY 364.5 billion (+13.7%)
- Net income S1 2025 CNY 103.4 billion (+15.5%)
- Adjusted operating margin : 39%
- Free cash flow Q1 2025 CNY 47.1 billion
- Total cash capitalization CNY 476 billion [zonebourse.com], [static.www...encent.com]
These results reflect efficient managementmanagement monetization thanks to AI, and a high high investment capacity.
