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Disruptive move: China's Tencent surpasses Facebook in valuation

23 November 2017

It is the company that owns WeChat, a very popular messaging app in China, and popular game franchises like League of Legends and Honor of Kings.

"Hong Kong valuations are still attractive and H-share financials look like a safe bet", said Sam Chi Yung, a Hong Kong-based senior strategist with South China Financial Holdings Ltd.

Tencent's market cap now exceeds e-commerce giant Alibaba Group Holding's US$474.15 billion, with Baidu behind at US$82.97 billion.

Tech conglomerate Tencent, which boasts China's biggest social network and gaming firm, has become the first Asian firm to enter the club of companies worth more than US$500bn.

It is closing in on U.S. technology firms including Facebook, which is worth $520.14 billion, and Amazon, which is valued at $544.46 billion. Last week it said its profits had jumped almost 70 per cent.

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Tencent's share price was lifted by the announcement that it would roll out its WeChat payment services in Malaysia next year.

Tencent also acquired a majority stake in Finnish smartphone maker Supercell, the firm behind the popular Clash Of Clans mobile game. WeChat almost at one billion overall users, but internationally, WeChat is not commonly used.

Other fast-growing parts of the business include digital content such as video, as well as online advertising, said CNBC.

On Tuesday, the Chinese giant behind the WeChat messaging app surpassed Facebook in value after its shares hit a record high of 439.6 Hong Kong dollars giving it a market capitalization of $534.5bn, surpassing Facebook's value of $519bn.

Tencent president Martin Lau said last week that its YouTube equivalent, Tencent Video, has become the video streaming service with the largest paying subscriber base in China, at 43 million users. Barclays increased the price target to $59 from $49 for Tencent and increased its forecast for revenue for both 2018 and 2019.

Disruptive move: China's Tencent surpasses Facebook in valuation