Tencent: Stock Story

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<p><strong>As with any investment, your capital is at risk.</strong></p> <p>&nbsp;</p> <p><strong>Tell us about the company.</strong></p> <p><strong>Fernanda Lai:</strong> You might recall the days when instant communication with friends and family meant making a phone call, visiting in person, or using internet applications like AOL and MSN Messenger. Recognising the need for a service tailored to Chinese language and culture, Pony Ma created the desktop messaging platform, QQ.&nbsp;</p> <p>No one would have expected a free chatroom company to evolve into Tencent, one of the world's largest technology companies, and creator of the super app, WeChat, which has over 1.4 billion monthly users.&nbsp;</p> <p>&nbsp;</p> <p><strong>What makes this stock special?</strong></p> <p>Tencent’s diverse products serve as the digital glue for millions in China, connecting users across gaming, social media, payments, advertising and cloud computing. Even outside of China, its presence is felt with popular games like Clash of Clans and League of Legends, crowd favourites that have contributed to Tencent's success in becoming the world’s largest gaming company.&nbsp;</p> <p>The connected ecosystem of the company’s offerings means that both consumers and businesses have little reason to leave. Users can message friends, hail taxis and pay utility bills all within WeChat. This closed network gives Tencent an incredible data and distribution advantage. It has continued to deepen this by adding new products and services that improve the core user experience. For instance, Tencent Music, which is a music streaming platform that was incubated within the company, has become China’s dominant music streaming platform.</p> <p>Another example would be its strategic investments in over a thousand companies worldwide, including household names like Tesla and Spotify. These investments help it gain valuable insight into how the world is changing, which it can then bring back to its own business.</p> <p>&nbsp;</p> <p><strong>What could the future hold?</strong></p> <p>What Tencent has built makes a powerful platform for AI experimentation. AI is already enhancing advertising and gaming today. Click-through rates on a feed ad have already tripled, benefiting both consumers and businesses. Gaming is being enhanced to be safer and smarter, with tools preventing cheating and fraud, as well as bots that coach players.&nbsp;</p> <p>The engine of growth for Tencent has always been powered by bringing consumers and businesses closer together. And it has just scratched the surface on how integrating AI can kindle further growth.</p> <p>&nbsp;</p> <h3>Risk factors</h3> <p>This communication was produced and approved in November 2025 and has not been updated subsequently. It represents views held at the time and may not reflect current thinking.</p> <p>The views expressed should not be considered as advice or a recommendation to buy, sell or hold a particular investment. They reflect opinion and should not be taken as statements of fact nor should any reliance be placed on them when making investment decisions.</p> <p>This communication contains information on investments which does not constitute independent research. Accordingly, it is not subject to the protections afforded to independent research, but is classified as advertising under Art 68 of the Financial Services Act (‘FinSA’) and Baillie Gifford and its staff may have dealt in the investments concerned.</p> <p>All information is sourced from Baillie Gifford &amp; Co and is current unless otherwise stated.</p> <p>The images used in this communication are for illustrative purposes only.</p> <p><strong>Important Information&nbsp;</strong></p> <p>Baillie Gifford &amp; Co and Baillie Gifford &amp; Co Limited are authorised and regulated by the Financial Conduct Authority (FCA). Baillie Gifford &amp; Co Limited is an Authorised Corporate Director of OEICs.&nbsp;</p> <p>Baillie Gifford Overseas Limited provides investment management and advisory services to non-UK Professional/Institutional clients only. Baillie Gifford Overseas Limited is wholly owned by Baillie Gifford &amp; Co. Baillie Gifford &amp; Co and Baillie Gifford Overseas Limited are authorised and regulated by the FCA in the UK.</p> <p>Persons resident or domiciled outside the UK should consult with their professional advisers as to whether they require any governmental or other consents in order to enable them to invest, and with their tax advisers for advice relevant to their own particular circumstances.</p> <p><strong>Financial Intermediaries</strong></p> <p>This communication is suitable for use of financial intermediaries. Financial intermediaries are solely responsible for any further distribution and Baillie Gifford takes no responsibility for the reliance on this document by any other person who did not receive this document directly from Baillie Gifford.</p>