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Has Tencent Become a Private Equity Fund?


Has Tencent become a private equity fund?

A powerful ecosystem that spans across various industries

Tencent’s products and services helped shape China’s digital ecosystem

  • The giant Chinese tech company offers products and services across many sectors
  • For instance, the so-called Super App, WeChat has become an indispensable part of daily life for many Chinese citizen

Tencent’s revenue mainly comes from China, with a total of RMB609bn (US$84bn) in 2023

Value-added services represent almost half of Tencent’s revenues

Around 60% of VAS revenues come from games

Tencent secured its global presence by serving the needs of its customers

  • The world’s 24th most valuable company
  • One of the top 10 global cloud service providers in 2024
  • Ranked the biggest public video game company by revenue in 2023 by Newzoo

Tencent has tapped into 1bn Chinese internet users

  • WeChat – ranked the most used social media platform in China
  • Honor of Kings game – ranked the highest played game in China

WeChat and QQ users are among the largest in the world

Download the full report as a PDF

Interesting facts about Wechat

  • From a 2016 analysis, its 889m monthly active users spent an average of 50+ minutes and about 10 separate times/day
  • This is the same as the “combined time” users spend daily across all Meta apps such as Instagram, Facebook, Facebook Messenger, etc.

Tencent is facing tough competition from 4 established competitors

Tencent China – Founded 1998

Comm. Services sector, 105,417 employees, US$84bn revenue

Main segments/products

  • WeChat
  • Tencent Games
  • Tencent Video

Its competitive advantage

Competitive advantage through scaling diverse digital services, gaming dominance, and strategic investments.

How it achieved its competitive advantage

By creating a powerful ecosystem that spans across various industries such as gaming, social media, e-commerce, entertainment, and more. This ecosystem helped the company dominate the market.

Built on innovative mass market products

Since 2011 has been expanding through acquisitions

Is the company financially world class?

I use my World Class Benchmarking scorecard to measure if a company has a competitive advantage

I developed this scorecard ten years ago; here’s how we construct it

  • My team gathers the yearly and quarterly financial data of 26,000 companies worldwide
  • We then calculate each company’s Profitable Growth score
    • Which is a composite measure of both profitability and growth

Download the full report as a PDF

I use my FVMR methodology to determine the attractiveness of the company

Download the full report as a PDF

Download the full report as a PDF

DISCLAIMER: This content is for information purposes only. It is not intended to be investment advice. Readers should not consider statements made by the author(s) as formal recommendations and should consult their financial advisor before making any investment decisions. While the information provided is believed to be accurate, it may include errors or inaccuracies. The author(s) cannot be held liable for any actions taken as a result of reading this article.