Tencent Holdings Ltd. - ADR

Strong Financial Performance: Tencent reported total revenue of RMB 180 billion for Q1 2025, reflecting a 13% year-on-year (YOY) growth. Gross profit reached RMB 100.5 billion, up 20% YOY, with non-IFRS net profit attributable to equity holders at RMB 61.3 billion, an increase of 22% YOY. These figures underline the resilience and growth potential of Tencent's business despite market challenges.

AI Investments and Integration: AI capabilities are becoming a significant part of Tencent's growth strategy, with investments directed towards applications like Yuanbao and enhancements in existing services (advertising, gaming). Increased spending on AI represents a strategic shift, expecting to create value and generate returns in the long term. However, the company also acknowledged a potential lag in revenue growth relative to operating costs linked to these investments.

E-commerce and User Engagement: The Mini Shops within Weixin have shown rapid growth in GMV (gross merchandise volume), driven by user engagement strategies and enhanced support for merchants. Going forward, Tencent's focus will be on improving synergies within the Weixin ecosystem, signifying opportunities for maximizing monetization across various segments.