Alibaba, Tencent to hit $1t market caps within next few years: experts
Experts expect that certain Chinese technology giants, mainly Alibaba and perhaps Tencent, will become members of the $1 trillion market capitalization club within next few years.
The forecasts come as the companies’ market caps soar, but there’s still some way to go in terms of catching up with the top of the pyramid – their rivals in the US.
Last week, Google’s owner Alphabet become a trillion-dollar company for the first time. The company hit a market cap of $1 trillion in the final minutes of trading on Thursday night.
Alibaba had the sixth-highest valuation globally behind US social network giant Facebook as of Friday, when Alibaba was valued at $610 billion, with its shares at $227.43.
According to Alibaba, its revenue in the quarter ended on September 30, 2019 was 119.02 billion yuan ($16.65 billion), an increase of 40 percent year-over-year.
Another Chinese technology giant, Tencent Group Holdings, which is listed in Hong Kong, was valued at HK$3.81 trillion ($490 billion) on Friday. Its total revenues were 97.24 billion yuan, an increase of 21 percent year-on-year, according to Tencent’s third quarter financial report.
Chinese technology experts are optimistic that Alibaba would become the first Chinese mainlandbased company to have a market cap of more than $1 trillion, though they said that the well-known Chinese ecommerce giant needs to scale new heights in globalization.
“Alibaba has made some success in its global layout, such as in Europe, but it is also facing a bottleneck because it doesn’t have a product as popular globally as those provided by Google or Apple. That’s why it needs to make a breakthrough as soon as possible to push its market cap higher,” Zhang Yi, CEO of iiMedia Research and veteran internet observer, told the Global Times on Sunday.
Liu Dingding, a Beijing-based industry analyst, said that he anticipated that Alibaba’s market value would surge above $1 trillion “within the next two to three years,” citing the company’s rapid revenue growth.
Liu also told the Global Times that Tencent is expected to hit the $1 trillion market cap within the next few years, although Zhang is more pessimistic about that, saying Tencent didn’t do well in globalization.