Sam Dickie: Fisher Funds expert on the success of Tencent

While experts are weighing up the results of US-based tech giants, one Chinese company is dominating markets.

Tencent is a Chinese multinational technology conglomerate - and one of the highest-grossing multimedia companies in the world based, on revenue.

Sam Dickie from Fisher Funds explains further.

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Episode Transcript

Speaker 1 (00:00):
While everyone's obsessing over the US tech giants, the best
performing large tech company globally over the last year is
actually ten Cent, which is a Chinese company a lot
of people have never heard of. To talk us through this,
we have Sam Dickey from Fisher Funds with us. Hey, Sam, Hey,
he now ten Cent of the guys who do the games, don't.

Speaker 2 (00:17):
They that's right gaming? That Their primary business though, is Ya,
their WeChat app, so it's the so called super app.
So they've got sort of one point four billion users,
so a quarter of all Internet uses globally use the
app every day and you can do everything from paybills,
to invest a shop, to hail cabs, to book doctor's appointments,
and to play games. They're very big in global gaming,

(00:38):
so it's super sticky. So it's got this kind of
massive captive audience that use it for hours every day,
and it can drive revenue via payments, shopping, advertising, et cetera.

Speaker 1 (00:48):
And should investors care about it?

Speaker 2 (00:51):
Yes? Absolutely. I mean, it's a trillion dollar behemoth that
many haven't heard of, and it's it's a As I said,
its app is very very sticky, but it's been quite
a saga. I've got to say, because for years you
could avoid the low quality state owned enterprises like the
bloated banks and steel companies in China and just invest
in fabulous private companies like ten Cent to Ali Barber.

(01:12):
But then you might remember Jack Ma, the charismatic farm
founder of Ali Baba, reportedly got too big for his boots.
He criticized Chinese financial regulator publicly, and that kick started
a rolling series of crackdowns on private companies and tycoons.

Speaker 1 (01:26):
Has China carried on with that attitude of the crackdowns
or have they learned from it?

Speaker 2 (01:32):
No? So that did kickstarter sort of a three year
seventy five percent under performance by Chinese tech stocks versus
US tech stocks, But that has started to thaw so
sort of late twenty three and then into twenty four,
Beijing started to roll out new measures to support tech innovation.
And then the major turning point was in February of

(01:52):
this year and in president she hosted a high profile
tech symposium and who should be on stage with him
but Jack Ma, which very symbolic and a clear sign
that the crackdown was completely over. And China tech is
the best performing tech sector globally by far over the
past twelve months, and like you said here the ten
cents up sort of sixty percent, much more than video
and even meta.

Speaker 1 (02:13):
So where does this put us in terms of if
we look at the US tech companies versus the Chinese
tech companies, who's winning this one?

Speaker 2 (02:21):
Yeah, that the US China tech arms race. It really
is at fever pitch at the moment. So first of all,
take a step back before the President She's symposium and
sort of loving with Jack Maher. Remember we had that
the deep seek moment that you and I talked about
in January when a Chinese AI company showed the world
it could allegedly build AI models at a fraction of
the cost of the US players, and that drove kind

(02:42):
of a ton of enthusiasm around China made AI chips,
China made AI equipment, China made AI models, And let's
not forget China now leads the US now and things
like drones, electric vehicle manufacturing efficiency, and autonomous vehicle software.
So there's three companies in China now that have cracked
the critical level for full self driving riddle. So the

(03:04):
other thing that's really important is China is miles ahead
on the critical bottleneck of power generation required to power
this sort of AI tech arms race. So take a
step back ten or fifteen years, and both China and
the US had about about the same power generation capacity
of about a thousand gigawatts. Today China has three times
as much power capacity as the US, but the US

(03:26):
isn't a frenzy too. I'm not sure if you saw recently,
but Trump is on record gushing about Jensen Wang, the
Vidio CEO, saying, now these learned the facts of life
about Jensen, he's untouchable, and he's tried to rename artificial
intelligence because he doesn't like anything artificial. He's tried to
rename it genius intelligence. So it's all going just a
little bit frenzied.

Speaker 1 (03:47):
Okay, So what does this mean for investors.

Speaker 2 (03:51):
It is a reminder that this fabulist companies all around
the world, often the ones you haven't heard about. It's
also reminded that when you do invest in China, and
you and I have talked about China, it's not always
a stock market that's driven by fundamentals. It is massively
policy driven. So you really do have to read the
tea leaves. And that's why those sort of symbolic things
like she getting mar up on stage is really critical
to watch.

Speaker 1 (04:12):
Yeah, very interesting. Thank you so much. Sam has always
appreciate your expertise. At Sam to Key Officier Funds.

Speaker 2 (04:17):
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