Just saw the other post talking about undervalued Chinese stock and what is holding them back. Most common reasons named are weak shareholder return, China risk, and habit to burn profit on unending competition.
But Tencent is different isn't it? Of course there is China risk involved but it has generous shareholder return and Pony Ma is a cautious operator. But the stock is still down 35% from recent height.
Now I am just looking at Tencent's fundamentals. It currently has a forward PE of 12, its still growing revenue and profits at a steady 10% with considerable AI and ads optimization upside. In their recent report the management said if they rule out AI related spending then the true growth rate is around 17% which is very strong for business of this size.
It was grouped in the AI loser basked, but its recent model Hy4 preview is very competitive and its AI product Workbuddy is gaining traction. It also has a very wide moat in the form of Wechat.
What do you guys think?