Tencent Passes Facebook in Market Valuation

Nov 23, 2017, 00:27
Tencent Passes Facebook in Market Valuation

By Tuesday afternoon, Tencent's market capitalisation had reached 4.15 trillion Hong Kong dollars ($531 billion), surpassing the United States social network's $519 billion. So it hasn't beaten the American social media company by a huge margin, however, the company has been experiencing a rally this year which has pushed its market value up $292 billion, a 127 percent rise just over this year. This came after the market value for the company reached a record $500 billion.

Tencent is certainly creeping up on US based firms like Facebook, with its $520.14 billion and Amazon, now valued at $544.46 billion. Since then, the company has managed to rally nearly 11.25%. Last week it said its profits had jumped almost 70 per cent.

The company's key product is popular messaging service WeChat, which is closing in on 1 billion users overall (but hasn't seen that same success overseas).

Tencent and Chinese internet rival Alibaba Group Holding Ltd. both zoomed into the global top 10 this year, as shares of the pair soared on bullishness about their growth prospects.

Mobile and online games are an important part of its business, as the division took in more than $4 billion worth of revenue during the most recent quarter.

Image source Bloomberg via SCMP
Image source Bloomberg via SCMP

Company president Martin Lau said Tencent will invest further in digital content, namely online video, with a focus on overseas a acquisitions.

While Tencent may not be a household name in the USA, it's continuing to push into new areas, including making big investments in America.

Analysts have a positive view on Tencent.

Hong Kong Exchanges and Clearing was the top performer on the day after Morgan Stanley raised its price target, and turnover on the bourse climbed to a two-year high.

"Tencent's disciplined execution and well-positioned multi-engine growth strategy should sustain its valuation premium in the medium to long-term", Daiwa said in a note on November 15.