China’s Tencent Surpasses Facebook To Become World’s Fifth Largest Company

Chinese social networking giant, Tencent Holdings Ltd. has surpassed Facebook Inc. in market value, becoming the first Asian technology firm to join the world’s five largest corporations.

According to Bloomberg, Tencent shares hit a record high at $523 billion market value, marginally edging Facebook’s $522 billion at the close of the U.S. markets on Monday.

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Bloomberg

Investors piled into the Chinese social networking giant, extending this year’s rally to 127 percent and boosting its market value by some $292 billion, making founder Ma Huateng the mainland’s second-richest man.

Also Monday, Tencent beat Alibaba to become the first Chinese technology company to hit the $500 billion market capitalization mark.

Tencent’s climb however has stretched historical valuations. It’s now trading at more than 50 times forward earnings, higher than an average of roughly 30 over the past two years.

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The company went public in Hong Kong in 2004 at 3.70 Hong Kong dollars per share. Since then, it has rallied over 11,000 percent. Tencent’s stock this year alone is up 126.69 percent.

Still, Tencent is not well-known outside of China, but owns the country’s most popular messaging service, WeChat, which has close to 1 billion users.

Online and mobile games are a key part of the business — the division brought in over $4 billion in revenue last quarter. In 2016, Tencent acquired a majority stake in Finnish smartphone maker Supercel.

Tencent has also acquired stakes in both Tesla and Snap (both U.S companies), and invested in numerous start-ups in Asia, including India’s Uber rival Ola.

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