The market capitalisation of Tencent has rocketed through US$100bn for the first time, helping lift the share price of South Africa’s Naspers, which holds a one-third stake in the fast-growing Chinese Internet company, nearer to the R1 000/share level.
In trading in Hong Kong on Tuesday, Tencent reached a new record high of HK$422/share, lifting its market value to above KH780bn (US$100,6bn; R989,3bn).
In turn, this helped underpin a further climb in Naspers shares to a Tuesday morning peak and a new record high of R947,90/share, giving the JSE-listed company a market capitalisation just shy of R400bn. At this level, Naspers has roughly the same market value as US technology giant Hewlett-Packard, which employs 330 000 people and which generates annual revenues of US$120bn.
In the past 12 months, the Naspers share price has added 89,6%; Tencent has risen by 63,5% over the same period. Since listing in 2004, the Chinese firm’s share price has added over 10 000%, so a R10 000 investment in Tencent nine years ago would today be worth more than R1m.
The latest surge in Tencent’s share price comes after the Internet company announced it was paying US$448m for a 36,5% stake in Sohu.com, China’s third-largest search engine business. It has the option to increase the stake to 40%, the two parties said on Monday.
Bloomberg reports that by joining forces, Tencent and Sohu could be better positioned to compete with Baidu in search and mobile Internet as consumers spend more time using smartphones and tablets.
According to Bloomberg, revenue at the Shenzhen-based Tencent has more than doubled in the past two years. It also notes that Tencent is now worth more than McDonald’s and Boeing.
The company develops the popular QQ and WeChat instant messaging platforms, which together have more than a billion users, and generates more than half its revenue from online gaming. — (c) 2013 NewsCentral Media