Tencent’s market value soars to $34B
hong kong — Robust earnings from Tencent Holdings sent its market value surging by as much as $34 billion on Thursday, helping the Chinese technology giant briefly reclaim the mantle of Asia’s most valuable listed company.
The social media and gaming firm had posted on Wednesday better-than-expected net profit and gross profit margin for the first quarter, driven by the strong performance of its mobile gaming business and gains in its sprawling investment operations.
The results helped offset worries about pressure on Tencent’s margins as it spends heavily in areas such as gaming, entertainment, retail and e-commerce for growth amid stiff competition from Alibaba Group Holding and others. Those concerns have weighed on Tencent’s shares this year.
The shares climbed 7.1 per cent to an intra-day high HK$424.20, their biggest daily rise in nearly three years, before shedding some of the gains to be up 5.1 per cent in the afternoon and giving it a market value of about $504 billion. At the day’s high, its market capitalisation was about $514 billion, surpassing Alibaba’s $507 billion.
Despite the share jump on Thursday, Tencent’s market value, at current exchange rates, is some $70 billion lower than its January peak.
Tencent’s first-quarter profit soared 61 per cent and revenue climbed 48 per cent. Its gross margin was 50.4 per cent, the first sequential rise since mid-2015.
A major contributor to the bottomline was investments by Tencent, which brought in 7.6 billion yuan in gains.