My 2nd Tenbagger – The Tencent Story

Note: a “Tenbagger” is a stock having increased ten times of the initial value for an investor. The term was created by Peter Lynch, the most successful fund manager in the world.

Nothing is better learning experience than a real story. I bought Tencent shares at around HKD150 per share in 2009 to 2010. After the 1 to 5 share split, my initial buying prices on average became HKD30.59 per share based on the records from my brokerage firm. I sold all Tencent shares at HKD343.04 in Oct 2017, making 11 times of my initial investment from 8 years ago. So it’s actually a Elevenbagger! It was my biggest holding and most successful investment.

Why did I buy it?

When I initially noticed Tencent, it had not created Wechat. At the time, most of people in China, not to mention worldwide, never had heard of Tencent, including myself, but knew QQ well. My guess was that at least half of the population using a PC in China used QQ on daily bases. They used QQ to chat on PCs. Why only half of the population used it? The other half was using MSN messenger and most of them were white collar workers, working in multinational companies in tier one Chinese cities. They even looked down on people using QQ, who worked for local Chinese companies, or worked as blue collar workers, owning less income, living in smaller cities.

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