Tencent Holdings Ltd (TCEHY)
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Why trade Tencent (TCEHY) shares?
In mid-March 2025, Tencent published its Q4 24 earnings report, which showed that earnings exceeded forecasts, boosting optimism about the company’s future trajectory. The report also revealed that revenue reached US$23.91 billion compared to the anticipated US$22.98 billion. Additionally, revenue rose 11% year-over-year, while profits were up by 90% compared to Q4 23 figures.
Tencent’s management continued to invest heavily in developing high-quality AI tools during the same quarter to enhance the firm’s productivity and product offering. The earnings report revealed that the company spent US$10.45 billion on AI research and development in 2024, almost three times more than its 2023 capital expenditure.
The company’s gaming division also delivered a solid performance in the last quarter of 2024, as profits coming from the domestic Chinese market surged by 23% to reach US$4.51 billion. The international gaming market followed suit, generating US$2.17 billion in revenue.
What influences the price of Tencent?
China’s economic outlook:The energy sector is one of the first industries likely to be impacted by global market upturns or downturns. Energy companies such as Shell tend to get a boost when forecasts indicate potential economic growth as demand for energy is likely to increase. Conversely, when economists forecast a possible recession, energy prices tend to drop due to an expected decline in demand.
Trade War:Tencent’s global digital presence could place it at the centre of ongoing trade conflicts between China and the US, two of the world’s largest economies. US President Donald Trump has claimed that China has gained control over many markets around the world at the expense of the US economy, accusing the Biden administration of its lack of response. As part of the trade conflict, Trump has imposed up to 145% tariffs on Chinese goods (and China has imposed levies of 125% on US goods). The US administration has suggested that it aims to bring manufacturers and service providers back to American soil, so there is no guarantee that Tencent will remain unaffected in the future.
Competition:Tencent operates in a highly competitive market. Some of its major rivals are Alibaba, ByteDance, Baidu, NetEase, DeepSeek, to name a few. Having such brand names as competitors leaves the Shenzhen-based fintech company little room to relax its efforts for more market share and innovation. Over the past two years, Tencent and its competitors have been riding the AI wave, redirecting and committing considerable funds to developing new models that would give them an edge in the fintech world. Technological advancements could give Tencent shares a push; in contrast, failure to reach set goals could affect the company’s valuation.
How can I trade Tencent (TCEHY) Share CFDs?
To trade Tencent (TCEHY) Share CFDs (Contracts for Difference), knowledge of the stock’s fundamentals as well as current price action is needed (technical analysis). This will also help you develop trading strategies specific to certain markets. It’s equally important to understand and utilise risk management tools to help mitigate the effect of market downturns.
Before executing a trade on the TCEHY stock, consider visiting the FP Markets Academy, a dedicated space to help new and advanced traders learn about trading in the financial markets through easy-to-follow educational articles and videos.
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Tencent Holdings Ltd (TCEHY) Trading FAQ
Despite the ongoing trade concerns between China and the US, Tencent executives demonstrated their confidence by announcing an investment budget increase to boost the company’s AI capabilities and product offering.
Tencent CEO Martin Lau emphasised that the company’s key focus will be AI projects, allocating 12% of its total revenue to related expenses. The Chinese firm has already integrated DeepSeek technology into its WeChat (social network app) and Yuanbao (AI assistant) core products. According to Tencent’s report, Yuanbao’s daily users surged twentyfold in the February-March 2025 period. In January 2025, Tencent presented its Hunyuan3D-2.0 model, an AI tool that turns text or images into 3D graphics.
AI is not the only major area of investment for Tencent. In March 2025, the Chinese company invested US$1.25 billion in Ubisoft, the French maker of the Assassin’s Creed video games, becoming its second major stakeholder. Tencent also plans to invest over half a billion US dollars in data centre infrastructure outside China, with one of the largest projects located in Saudi Arabia.
Although Tencent’s executives are optimistic about the company’s continued growth, investors and traders should conduct their own research and due diligence before investing. Traders should be aware that market shifts could occur unexpectedly, highlighting the importance of employing risk management tools.
As one of the largest Chinese companies in terms of market cap, Tencent may be an attractive investment option for those seeking diversification. Purchasing Tencent’s physical shares, using a cash account with unleveraged capital, is one of the ways to do that. Adding Tencent’s shares to your portfolio means that you own a fraction of the Chinese tech company and may receive regular dividend payouts. On top of that, owning shares grants you voting rights.
Trading Tencent Share CFDs works a bit differently than buying actual shares. With CFDs, you don’t own the shares – you’re speculating on the company’s share price. Before starting to trade, it’s important to understand two key concepts that may give trading Share CFDs an edge over investing in physical shares: margin and leverage. Margin is the amount of money you need to open a trade. By trading on margin, you leverage your trading capital, thereby increasing your return on favourable trades and equally your losses in unfavourable positions; this is why you often hear the term ‘double-edged sword’ when referring to leverage. It should be noted that trading Share CFDs does not grant traders any voting rights.
To control larger positions with less upfront capital, traders rely on two key factors: leverage and margin.
In this case, if the Tencent stock is trading at US$59.40 per share, purchasing 100 shares would require an initial investment of US$5,940 (US$59,40 * 100). This would represent an unleveraged capital position, meaning the full value of the trade would be covered by your own funds. However, if the margin requirement for TCEHY Share CFDs is 5% (the upfront capital required to open a trade), you can trade an equivalent position size of 100 shares with US$297.00 (US$5,940 * 0.05). This way, traders are permitted to control the full position size, while committing only a fraction of its total investment value.
In addition to understanding position sizing, learning how leverage and margin works is essential when trading Share CFDs.
Trade concerns between the US and China could act as a headwind for Tencent’s future growth. The Trump administration has shown that it would like to reduce the effect of Chinese tech companies on the US economy, putting firms such as Tencent in its sights.
Economic recession in China could also impact TCEHY Share CFD positions as low economic growth recorded in the next quarters could make investors reluctant to invest in the Chinese fintech market. With the competition being fierce, investors should also closely monitor any updates coming from the AI sector.
Like any financial instrument, volatility is a key risk factor that must be taken into account. For example, elevated volatility can increase slippage and impact execution performance. Traders should use risk management tools to help reduce losses if markets move against their forecasts.
Whether you're trading TCEHY Share CFDs or any other financial instrument, your approach will depend on your mindset and strategy. Every trader is different, but one thing that helps is having a solid Trading Plan. That means knowing how you want to trade, what strategies you will be adopting, and how you plan to limit your risk.
An FP Markets trading account offers access to top-tier trading platforms for shorting TCEHY Share CFDs. Shorting Tencent Shares with CFDs requires traders to fully understand how trading works and which risk management tools should be used to minimise potential losses. Trading platforms are important components of every strategy implementation, which means that traders need to learn their different functions, ensuring that they will be able to make the necessary adjustments if markets move against their plans.
There is an array of trading platforms on the market that can be useful for trading Tencent Share CFDs. With FP Markets, traders tend to trade Share CFDs through two industry-leading trading platforms: MetaTrader 5 (MT5) and cTrader. MT5 and cTrader have been developed to give traders, whether beginners or experienced, the necessary tools to build a comprehensive strategy that could withstand significant market fluctuations. Both platforms, available via an FP Markets trading account, come with an easy-to-use interface, advanced trading tools, and market analysis features that can contribute to an enhanced trading experience.
Swap Fees (Overnight Fees):
- Long positions: -8.5%
- Short positions: 2.5%
Commission Charges:
- 0.20% commission per side
- US$2 minimum charge per side
Tencent’s quarterly and yearly earnings reports can affect Tencent’s share price and, in turn, TCEHY Share CFD trading positions. Earnings reports share valuable sets of data with market analysts and investors, including forward guidance which reflects a firm’s future goals. Scrutinising an earnings report requires financial knowledge that would help investors filter in-depth information. An earnings report that reflects optimism could push share prices up, while a negative one could lead investors to invest in other companies.
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