around 23.8 times 2022 earnings estimates.
Still, because Tencent's investment portfolio is so much larger than Alibaba's, the multiple on its core business is really cheaper than that. And since Tencent seems to have a more diversified business and a better investment track record, and since it appears to be a better corporate actor, it would be my preference for those looking to play a Chinese tech rebound.
You may notice in the disclosures that I own Alibaba shares but not Tencent. That's because I've chosen to own Tencent via its largest shareholder, which is also publicly traded and currently trades a significant discount to the value of its Tencent stake, and that holding is significantly bigger than my Alibaba allocation. However, those looking for more direct and "clean" exposure to Tencent would also be fine owning Tencent shares or ADRs outright.
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Billy Duberstein owns shares of Alibaba Group Holding, JD.com, and Sea Limited and has the following options: short January 2022 $170 puts on Sea Limited. His clients may own shares of the companies mentioned. The Motley Fool owns shares of and recommends Activision Blizzard, Alibaba Group Holding, JD.com, Sea Limited, Tencent Holdings, and Tesla. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.