Mo­men­tum can be re­cov­ered

Ten­cent’s re­cent re­sults wiped $170bn off its mar­ket cap, but there is scope for growth in the com­pany and in Naspers

Financial Mail - - MONEY&INVESTING - Ann Crotty

In early May a 13,000-word es­say ti­tled “Has Ten­cent Lost Its Dream?”, pub­lished on a web­site owned by the com­pany, sparked heated de­bate across China about the fu­ture of the coun­try’s most valu­able com­pany and its most valu­able brand.

The com­pany, said the au­thors, had be­come hugely wealthy by aban­don­ing the orig­i­nal in­no­va­tion that had driven its early growth in the late 1990s and was now noth­ing more than a hi-tech in­vest­ment com­pany buy­ing other peo­ple’s ideas. It had cre­ated noth­ing in­no­va­tive in the past eight years and had lost its cre­ative mojo, said the au­thors, in­ti­mat­ing this would even­tu­ally take its toll.

More sig­nif­i­cant than the truth or oth­er­wise of the ar­gu­ment was that within hours more than 100,000 peo­ple had read the es­say, and many had ex­pressed strong views on it.

The heated re­sponse to the con­tro­ver­sial ar­ti­cle re­flected, yet again, that Ten­cent is more than just an eye-pop­pingly valu­able com­pany — it is a Chi­nese in­sti­tu­tion.

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