Tencent's stellar share rally sees it surpass Facebook
in market value
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[November 21, 2017]
By Donny Kwok
HONG KONG (Reuters) - Tencent Holdings Ltd
has racked up some impressive gains this week - becoming the first
Chinese firm to be worth more than $500 billion and surpassing Facebook
to be the world's fifth-most valuable company.
Earnings for China's biggest social network and gaming firm have surged
on the popularity of its smartphone games led by titles such as Honour
of Kings - a fantasy role-playing game, which has as many active players
as the population of Germany.
Also driving earnings has been its messaging-to-payment superapp WeChat
which has amassed 980 million monthly active users, with 38 billion
messages sent daily, while its Youtube equivalent, Tencent Video, has
become the video streaming service with the largest paying subscriber
base in China.
That success has helped Tencent's stock more than double this year,
making it Asia's most valuable company worth $522 billion on Tuesday and
easily outpacing a 36 percent rise in the benchmark Hang Seng Index <.HSI>.
That beat Facebook's market value on Monday of $519 billion. Only Apple
Inc <AAPL.O> with a market capitalisation of about $873 billion followed
by Alphabet Inc <GOOGL.O>, Microsoft Corp <MSFT.O> and Amazon <AMZN.O>
are worth more.
Led by Chinese billionaire Pony Ma, Tencent this month reported a
better-than-expected 69 percent rise in third-quarter net profit.
"Tencent's high growth, as demonstrated by its quarterly results, has
supported the rally in its shares," said Steven Leung, a sales director
at UOB Kay Hian.
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Facebook logo is seen at a start-up companies gathering at Paris'
Station F in Paris, France, January 17, 2017. REUTERS/Philippe
Wojazer - RC1F2BC5E4F0
"Since the company has been able to deliver with its earnings, the stock
is still worth holding onto despite its current high level."
In addition to robust earnings, Tencent has also burnished its lustre
after some units and affiliates have made some eye-catching market
An executive recently also told Reuters the company is close to making
Malaysia the first foreign country to roll out its WeChat ecosystem,
pitting it against Alibaba <BABA.N> as they scramble for new growth
opportunities outside China.
Among the 39 analysts who cover Tencent, the average rating on its
shares is a "buy", with their average target price at HK$433.60. The
stock closed at HK$430 on Tuesday.
After Tencent, rival Alibaba Group ranks second among Asian firms with a
market value of $481.5 billion, while South Korea's Samsung Electronics
<005930.KS> is No. 3 at $364 billion.
($1 = 7.8127 Hong Kong dollars)
(Additional reporting by Patturaja Murugaboopathy and Vidya Ranganathan;
Editing by Anne Marie Roantree and Edwina Gibbs)
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