Oct. 21 (Bloomberg) -- Tencent Holdings Ltd., Asia’s biggest Internet company, surged to a record in Hong Kong trading after analysts at Barclays Plc named it among its top picks in China’s online sector.
The shares rose 4.2 percent to close at a record HK$447.80, giving the company a market value of $107 billion. Tencent, along with Qihoo 360 Technology Co. and Ctrip.com International Ltd., are the top picks for Chinese Internet stocks, Barclays analysts led by Alicia Yap said in a report today.
Tencent, which has doubled annual revenue in the past two years, is tapping into the sevenfold surge in China’s online population since its 2004 initial public offering with games, e-commerce and the WeChat instant messaging service. The stock is also benefiting from a rally in U.S. Web stocks as Google Inc. and Facebook Inc. reached record highs last week, said Billy Leung, an analyst at RHB Research Institute Sdn. in Hong Kong.
“Tencent has higher revenues and net income and is more diversified. So I would say that the market is appreciating this increasingly,” said Duncan Clark, the Beijing-based chairman of BDA China Ltd., which advises technology companies. “WeChat has over 100 million users outside China and Tencent is more active in taking stakes in leading games or social companies overseas.”
Last month Tencent paid $448 million for a 36.5 percent stake in Sohu.com Inc.’s Sogou search unit, China’s third largest. The company controls Riot Games Inc., a Los Angeles online-game publisher.
Shenzhen, China-based Tencent had 990 million registered instant messaging accounts at the end of the second quarter compared with about 1 million accounts in 1999, according to its website.
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