Introduction Given the growth rate and scale of China’s economy, it wouldn’t be too farfetched to envision a future where the largest Chinese companies could rival the size of the US mega caps. Currently, the largest Chinese tech company by market cap is Tencent. Its market cap stands at US$770bn, with an annual revenue of US$74bn and net profit of US$25bn in 2020. For context, Tencent’s market cap is still only:

• One-third the size of Apple’s (FY2020: revenue of US$275bn and net profit of US$57bn)
• Less than half the size of Amazon’s (FY2020: revenue of US$386bn and net profit of US$21bn)

For investors who are keen to get long-term exposure to Tencent, we discuss why buying into Prosus (Tencent’s largest shareholder) is currently preferred in our view, compared to buying Tencent directly.

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