TCEHY Stock Recent News

Chinese tech giant Tencent has reported strong Q1 2025 results amid a challenging backdrop, with revenues and margins growing healthily. Despite plenty of risks and uncertainty, TCEHY management has invested heavily in AI, building a range of tools across the company's vast ecosystem. My valuation suggests that there is still modest upside from the current level, with much of the uncertainty now widely reflected in the share price.

Upgrade Tencent Music to Buy from Sell, citing strong Q1 results, margin improvement, and robust subscription growth. Music subscription momentum is driven by rising ARPU, paying users, and premium tier adoption, offsetting weakness in social entertainment. Potential M&A, especially with Ximalaya, could enhance content, user stickiness, and ARPU, though likely via dilutive stock transactions.

Tencent beat Q1 revenue expectations, but growth is unsustainable due to lack of gaming innovation and overreliance on existing IP. E-commerce expansion is intriguing but risky, given fierce competition and Tencent's previous failures in the sector. AI and advertising upgrades offer some promise, but macroeconomic weakness and unclear AI leadership limit upside potential.

Tencent delivered strong Q1/25 results with double-digit revenue and EPS growth, improved margins, and robust user growth across all business segments. AI investments, international gaming expansion, and margin improvements are key drivers for sustained double-digit growth and long-term value creation. Geopolitical risks and tariffs create uncertainty, but Tencent's domestic revenue dominance and financial strength provide resilience.

On May 11, the United States and China agreed to a 90-day pause in their trade dispute. The United States agreed to slash tariffs from 145% to 30%, and China agreed to reduce its reciprocal tariffs from 125% to 10%.

Tencent President Martin Lau said the company could create a "differentiated" AI agent through WeChat, the popular messaging app in China. Lau explained that WeChat, which is often dubbed a super-app, has various features like Mini Programs and content creation that can be tied together through AI.

Tencent has reaffirmed a commitment to keep spending on developing AI - which may crimp profit growth in the short term. But by integrating the technology across a suite of products it hopes to reap longer-term revenue and improve the gaming experience.

Tencent's president Martin Lau says company has a "pretty strong stockpile of chips." Last month, Nvidia said the Trump administration imposed new chip export restrictions to China.

Shares of Chinese tech giant Tencent Holdings (TCEHY 3.46%) rallied today, up as much as 4.5% before settling into a 3.5% gain at the end of the trading day.

Tencent Holdings Limited (OTCPK:TCEHY) Q1 2025 Earnings Conference Call May 14, 2025 8:00 AM ET Company Participants Wendy Huang - IR Pony Ma - Chairman and CEO Martin Lau - President James Mitchell - CSO John Lo - CFO Conference Call Participants Thomas Chong - Jefferies William Packer - BNP Alicia Yap - Citigroup Kenneth Fong - UBS John Choi - Daiwa Jialong Shi - Nomura Alex Yao - JPMorgan Ronald Keung - Goldman Sachs Wendy Huang Good day, and good evening. Thank you for standing by.