19 January 2018
Social media giant, Tencent has become the first Chinese tech firm to be valued over $500 billion. The company which is part owned by Naspers is now worth more than social networking giant Facebook.
Shares of the 19-year-old company have hit a record high of HK$430 on the Hong Kong Stock Exchange. This has increased the market value of the company to $522 billion, which is approximately $3 billion more than Facebook’s closing valuation of $519 billion.
Naspers owns 34% of Tencent which it acquired in 2001 for just $32-million. The part acquisition has been termed as "the deal of the century". Naspers's holding is now worth over $128-billion, making it the best performer on the JSE in 2017, with a 50% leap in share price.
Tencent's earnings have increased due to surged on the popularity of its smartphone games like Honour of Kings, which has a number of active players. The company also owns popular messaging app WeChat which has over 980 million monthly active users and sees over 38 billion messages sent daily. Tencent Video which is a Chinese equivalent of YouTube has the largest paying subscriber base in China.
"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 high level."