After Colin Huang of Pinduoduo overtook Jack Ma as the second richest person in China, Tencent has overtaken Alibaba as the most valuable company:

At market close, 23 June 2020. Source: HKEX

This is following a recent rally:

Tencent’s stock performance over the last five years

We have been writing about Tencent for a while. Just a review of some of the TLD blog entries: 

Despite the facts that everyone uses WeChat in China or plays League of Legends/PUBG, many outside China know Alibaba better, maybe because of its name, maybe because of the charismatic nature of its founder, Jack Ma.

However, Tencent’s Pony Ma (no relation) is currently the richest person in China, ahead of Jack and Pinduoduo founder Colin Huang.

Tencent – the lesser known Alibaba nemesis

In the beginning of 2018, Tencent share price reached a new high (and not much different from the current levels). The next half a year was painful – dropping prices, and lots of voices of doubt about the company’s future in China:

Why Tencent’s share price dropped so much

Is Tencent losing its business?

However, Tencent has been, and still is, very successful in its investment strategy. Unlike Alibaba, who basically seeks to have tight control over any investee, Tencent’s more laissez-faire approach is achieving better results.

Meituan is in its portfolio, and Shopee of SEA Group, which Tencent is the biggest shareholder, is faring much better than Lazada. Its oversea investments include lots of gaming, and much more:

Gaming the right way? Tencent’s overseas investment strategy

Can Tencent match Ant Financial after $175 million investment in Philippine e-payment?

Tencent puts US$200m in Brazil’s Nubank – is it a wise investment?

Who are the new investors of GoJek?

Inside China, it has been exploring new businesses, and built a few listed companies under the group. There are doubters, but the company seems to have solved its internal problems (which are common to any company of that size) and puts itself back in the growth trajectory.

Tencent doomed to fail in B2B?

Tencent kills Shazam

The threat of ByteDance, formerly known as Toutiao, is probably the biggest for Tencent. ByteDance’s international ambitions are also quite obvious – and being a young company, it does not have the baggage that marred global expansion of Chinese companies including Alibaba and Baidu:

Tencent goes to war

Tencent goes to war with Toutiao

ByteDance’s huge international ambitions laid bare

We will give a more systematic assessment of Tencent over the coming weeks, watch this space!

btw, this sharing by WeChat’s creator has some very profound thoughts which are worth reading:

2020 Reflections of the Creator of WeChat

Thanks for reading The Low Down (TLD), the blog by the team at Momentum Works. Got a different perspective or have a burning opinion to share? Let us know at hello@mworks.asia.

 

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