Follow Tencent, China's Internet gaming giant
Understanding how the firm makes money is crucial for investors looking to get exposed to the Hang Seng Index
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TWO weeks ago, this column featured Hong Kong's Hang Seng Index (HSI), and argued that the rule of law in the territory means it is the first port of call for global investors to buy China. Today, we take a look at the largest component of the HSI: Internet giant Tencent, which now forms a full 10.7 percent of the index, making it bigger than HSBC.
Anybody buying an exchange-traded fund (ETF) tracking the Hong Kong market will have substantial exposure to this new economy stock, which makes money through selling virtual items and online services, and is investing in a broad range of e-commerce, sharing economy, logistics and finance plays.
Understanding how the company works is crucial, especially how its revenues get recognised, and in the light of Facebook's potential entrance into China.
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