The market seems to view Tencent Holdings Ltd (Tencent) as an online games company which also owns WeChat (the WhatsApp of China). We think this under represents the potential at Tencent. For a start Tencent also owns mobile QQ and the two platforms have the highest number of monthly active users (MAU) and highest average usage in China. Tencent is able to monetize directly through games and indirectly through high user engagement. Tis high level of engagement is attractive to advertisers while evolving advertising technology (Adtech) should enhance growth prospects. We expect Tencent's ad growth top be 3x that at Baidu Inc Spon Adr (BIDU) in the next 5 years, mirroring the experience of Facebook vs Google in the US. 

Tencent remains a key thematic idea at New Street Research as it increasingly monetizes its vast user base. The current share price correction looks like an opportunity.

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