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Tencent's stellar share rally sees it surpass Facebook in market value
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.
That beat Facebook`s market value on Monday of $519 billion. Only Apple Inc with a market capitalisation of about $873 billion followed by Alphabet Inc, Microsoft Corp and Amazon 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.
"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 debuts.
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 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 is No. 3 at $364 billion.
($1 = 7.8127 Hong Kong dollars)
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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