Tencent is now the world’s most valuable social networking company
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Tencent is now the world’s most valuable social networking company

After an incredibly strong rally, which saw its value climb by $292 billion, Tencent has become the fifth most valuable company in the world. In doing so, it has ousted Facebook from the top 5 and become the world’s most valuable social networking company. The WeChat operator, and Chinese mobile game kingpin, now has a market cap of $532 billion – just edging out Facebook, which is worth $522 billion. The four companies that (for the moment) have it beat are: Apple, Alphabet, Microsoft, and Amazon (in that order, from biggest to smallest).

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While the extent of Tencent’s ascent is incredible, the things that are driving it are not hard to see. The company’s WeChat app is ubiquitous in China, and Tencent is no slouch when it comes to innovation – WeChat is evolving into a powerful advertising and payments platform. Likewise, its mobile gaming division is hugely successful, with hit games like Honour of Kings (the world’s most popular mobile game) dominating the Chinese casual gaming scene. Investors seem to have faith that Tencent can continue to evolve its platforms and drive even deeper engagement from its billion-plus users.

Tencent’s share price is up by 121% so far this year

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SOURCE: Yahoo Finance

With a firm grasp on the mobile gaming and social network segments of China’s Ecommerce market, Tencent is looking outwards. Honour of Kings is slated for international launches, finance and streaming services are just around the proverbial corner. Tencent certainly has pockets deep enough to drive into these areas, and it’s displayed a capacity to do so as well.

Disclosure

Dominion holds Tencent in its Global Trends Ecommerce Fund.


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The views expressed in this article are those of the author at the date of publication and not necessarily those of Dominion Fund Management Limited. The content of this article is not intended as investment advice and will not be updated after publication. Images, video, quotations from literature and any such material which may be subject to copyright is reproduced in whole or in part in this article on the basis of Fair use as applied to news reporting and journalistic comment on events.