I have been keeping close tabs on this Chinese behemoth for a while now.
In the past 3 years, China has been in a rough spot. Its economy is still growing steadily but many investors have grown disillusioned.
But DeepSeek in January 2025, rekindled everyone’s interest in the market. And so was I.
Tencent recently released its results for 1Q 2025 and I have been hyped!
It isn’t even close.
Tencent is China’s biggest company at a market capitalisation of US$606 billion. ICBC and Alibaba are only half of Tencent at around US$300 billion each.
But the company is thriving.
Despite the weak sentiments in China, Tencent’s 1Q 2025 results indicate otherwise.
Revenue grew by 13% to RMB 180 billion
Profits are up by 14% to RMB 48 billion
And its higher performance was driven mainly by
Domestic games: +24%
International games: +23%
Marketing (online advertising): +20%
Two things caught my eye about Tencent:
Its strategy of ‘evergreen’ for games.
The use of AI in its WeChat and partnership with DeepSeek
Evergreen gaming is a strategy of publishing a game originally on one platform (let’s say PC) across multiple platforms (like mobile).
Tencent basically did that with Dungeons and Fighter Mobile. And the results have been positive.
Many Chinese gamers who were big fans of Dungeons and Fighter (DnF) on the PC client, flocked to the mobile version.
What got me out of my chair is Tencent’s bid of US$1 billion to acquire about 25% of Ubisoft, which will grant them a potential right to bring the popular Assassin’s Creed franchise to mobile.
This release could be HUGE in the Chinese and international market, if done correctly. With DnF being successful, this is looking quite possible.
What about AI for Tencent?
It already has plans to integrate AI (possibly with the help of DeepSeek’s program) into WeChat.
And you know what I like about this?
WeChat has 1.4 billion monthly users in the Chinese market. Almost everyone uses WeChat.
Even with the tariffs by the U.S., I don’t think Tencent will have difficulties in securing an adequate supply of Nvidia chips to power their models.
If anything, they can instead, buy Huawei’s chips.
Things could be big for Tencent in the next 2 to 3 years.
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