Jul 28, 2020 / News
Tencent steals Facebook’s social media crown with rally that adds US$207 billion to market value this year
The Chinese online games and WeChat giant soared 4.5 per cent to HK$543.50, taking its market capitalisation to just under HK$5.2 trillion (US$670 billion), compared to the American rival’s market value of US$657.8 billion.
Tencent has rallied about 45 per cent this year in Hong Kong, adding HK$1.6 trillion in value to investors. Facebook gained about 14 per cent in New York at the same time.
Just over two weeks ago, Alibaba, the e-commerce behemoth and owner of the South China Morning Post, ousted Facebook as the world’s sixth most valuable company. Alibaba’s market capitalisation is about US$677.4 billion.
American technology and internet companies have long been the world’s leaders. China’s growing innovation and clout in everything from digital payments and 5G development to online games and e-commerce are part of the raft of tensions rising between Washington and Beijing. It may have prompted Tencent into making an offer to privatise its search engineunit Sogou from the US market.
“With rising China GDP growth, we will see more and more Chinese companies entering the top 10 or top 100 companies,” said Kenny Wen, wealth management strategist at Everbright Sun Hung Kai. “This long-term trend will continue in the foreseeable future. However, the pandemic and worsening China-US relationship may make the situation complicated.”
Tencent’s ecosystem is stuffed with games, social networking, mobile payments, music and videos, as well as the cloud. Its WeChat social media, messaging and mobile payments app has more than 1 billion monthly active users. The stock has clawed its way back from a disastrous 2018, when it faced a nine-month freeze on game approvals.“You can barely get through a day without touching one of Tencent’s applications,” Vey-Sern Ling, senior analyst at Bloomberg Intelligence said in an interview with the Post earlier this year.
[...]