Tencent snatches top Asian title from Alibaba

ALIBABA Group Holding surrendered the title of Asia’s largest internet company to Tencent Holdings, capping a 10-month slide for the e-commerce giant that wiped $140.7 billion (R1.9 trillion) from its market value.

Shares of Alibaba dropped 4.7 percent to $60.91 in New York on Tuesday, making the online marketplace worth $153bn. That is below Tencent’s value for the first time since billionaire Jack Ma oversaw Alibaba’s record-breaking initial public offering in September 2014.

Alibaba’s reliance on consumer spending in China, where it gets 83 percent of its revenue, leaves it vulnerable to the domestic slowdown.

Tencent is adding pressure by buying Hollywood content for the company’s video platform, investing in cloud computing and on-demand mobile services, while forging an e-commerce alliance with JD.com.

“Alibaba’s second quarter earnings were not that impressive, whereas Tencent has bright prospects of generating money from mobile advertising,” said Jeff Hao, a Hong Kong-based analyst at China Merchants Securities Holdings. “Alibaba also gave some negative guidance for its performance for this quarter.”

Decline

The decline in Alibaba’s market capitalisation is almost equivalent to the entire value of Samsung Electronics.

Tencent is defying a threemonth downturn in Chinese stocks by gaining 19 percent this year in Hong Kong trading. The owner of China’s mostpopular messaging services WeChat and QQ rose 3.3 percent yesterday, reaching a market capitalisation of HK$1.26 trillion (R2.22 trillion).

China may be lending Tencent shares a hand. Last month, the government cut rates for the fifth time since November and resumed intervening in equities, seeking to arrest a stock market rout that wiped out trillions of dollars in value. That has helped prop up stocks in neighbouring Hong Kong.

Alibaba shares are going in the opposite direction as investors’ early optimism over its prospects were superseded by worries about a Chinese economy headed for its slowest pace of growth in 25 years. It debuted September 19 and surged 38 percent the first day

On Tuesday, investor relations chief Jane Penner said gross merchandise value in the quarter to September might come in lower than the company had forecast. – Bloomberg