Value Investigator
Quality-Growth Investor, Fundamental Research & Portfolio Strategy
Tencent is one of the greatest businesses in the world, growing double digits yet trading at just 11 times earnings, or 8.4 times excluding its portfolio of listed and private companies. Meaningful buybacks and a dividend counter @dolores_capital's claim that it is not run for shareholders, and no Western company such as Meta will ever compete with it. China carries risk, but numerous international investors have made money in Tencent since 2005. x.com x.com x.com x.comÂ
Tencent offers strong downside protection plus several sources of upside. Net of cash and investee stakes it trades at about a 9.5% free-cash-flow yield, and $21.6B net cash, $80.6B of listed stakes and about $50B of unlisted ones cover roughly 20% of its $506B market cap with no long-term debt. It dominates Chinese social media, gaming and music. Upside comes from conservative AI gains in ads and cloud, buybacks management says target an undervalued stock, and convergence to US peer multiples. … Show more
Tencent is starting to look a bit too cheap at 13 times forward earnings. x.comÂ
Tencent's EV/EBITDA is at its lowest in a very long time, which may make it time to start buying. x.comÂ
Tencent owns one of the best closed loops from intent to identity to payment to fulfillment, yet trades as if AI agents will bypass it. Weixin combines 1.44 billion users with chat, payments, Mini Programs and merchant reach, so its Xiaowei agent can hand work to services that already know the user, a distribution and return advantage. About $75 billion of cash and $128 billion of investments against a $491 billion market cap leave the operating business near 7x roughly $40 billion of earnings. … Show more
Chinese stocks are uninvestable for long-term investors because the value created goes to the Communist Party, not shareholders. The Chinese index is down 16% since 1991 while the S&P 500 rose 1,570% and the Nasdaq 3,440%, and Alibaba has gained just 27.8% in 12 years since its IPO. When companies grow too strong, the party hits them with megafines, sidelines founders like Jack Ma or blocks game releases as at Tencent, and foreign investors own only VIE contracts, not shares. x.com x.com x.com … Show more
Meta is a better buy than Tencent because it carries no China risk and offers more than twice the growth, even with Tencent at 15 times earnings. x.comÂ
Alibaba and Baidu are winning trades as highly cash-generative value plays, not a return to hyper-growth. With domestic tech capex matured, both are aggressively retiring shares through large buybacks and paying robust dividends, so they are being repriced like value utilities rather than high-beta tech. Hated sentiment creates asymmetric risk-reward, but expecting Alibaba to triple to $300 on old growth multiples is a trap. x.comÂ
XPeng's $900M robotics raise is a huge vote of confidence from major players, implying either its humanoid tech is the real deal or a deluge of humanoid investment is coming. Per @wallstengine, the round valued XPeng Robotics at $6.3B+, led by IDG Capital with Tencent and Alibaba, to scale toward IRON mass production by year end and deliveries in 2027. It also offers a favorable valuation comp for XPeng, which had looked cheap at under 1x; its robots' relative strength is dexterity. x.com x.comÂ
Alibaba looks undervalued at a 52-week low, with a $229B market cap against expected 2027 operating income of $90B and double-digit growth anticipated for the next few years. x.comÂ