Quite a change in the color of the ink. I’ve owned China’s Tencent (the TCEHY ADRs), the world’s biggest computer game company, in my long-term 50 Stocks portfolio since January 3. 2022. I spent lot of 2024 looking at red ink in the position–and experiencing vertigo from the volatility in an asset that has traded within a 52-week range of $37 to $72.
But the recent picture looks very different. The year to date return for 2025 through the March 21 is 24% and the one-year return is a gain of 80%.
I think this run is like to continue. The ADR still trades at a 28% discount, Morningstar calculates. Big cap consumer-oriented stocks like Tencent look to benefit from China’s efforts to boost growth in its domestic consumer economy. And Tencent has enough AI exposure for the ADRs to gain from enthusiasm for that technology among China investors.
On Monday, March 24, I added these Tencent ADRs (TCEHY) to my Jubak Picks Portfolio here and to my Volatility Portfolio on my subscription site JubakAM.com.
On March 19, 2025, Tencent announced fourth-quarter results for 2024 that exceeded analyst expectations. Tencent’s revenue grew by 11% year-over-year to 172.4 billion yuan, surpassing projections of 168.95 billion yuan. Net income attributable to equity holders rose significantly by 90% to 51.32 billion yuan. The strong performance was driven by growth in gaming and AI-powered advertising. Domestic game revenue increased by 23%, while international gaming revenue rose by 15%.
In its AI Initiatives Tencent is focusing on introducing new models like Huny3D2 and Turbo S, and integrating AI into its services, including WeChat. (WeChat is China’s largest social media platform with 1 billion monthly users.) Tencent intends to commercialize AI by beefing up services such as advertising and WeChat, while spending on research to keep pace with Alibaba and DeepSeek. Tencent plans to devote a low-teens percentage of its 2025 revenue toward capital expenditures, including on AI infrastructure. That would be more than $10 billion in 2025. (In comparison Alibaba plans to spend $53 billion on AI over the next three years.) Tencent ramped up its purchases of AI chips in 2024’s final quarter to serve increased demand, which should translate into faster cloud revenue growth, the company said.
Tencent also announced plans to increase its annual dividend by 32% and repurchase at least HK$80 billion worth of shares in 2025.AFter the dividend increase the yield will be 0.87%
