New | Alibaba tops Tencent as Asia’s biggest company by market value
New-economy companies that owe their revenue to technology and the internet are now more valuable than oil refineries, manufacturers and banks
“Many international investors are eyeing the rapid growth of e-commerce in China and the internet business in Asia,” said Louis Tse Ming-kwong, director of VC Brokerage in Hong Kong. “That’s why Alibaba and Tencent have become their favourites.”
Alibaba’s shares have risen 28.8 per cent this year to US$104.64, making the operator of Taobao.com and Tmall e-commerce platforms the world’s 10th-largest company by value, according to Bloomberg data. The world’s five most valuable companies now owe their revenues to technology or the internet: Apple, Alphabet, Microsoft Corp, Facebook and Amazon.com.
The same goes in Asia, where technology and internet-related businesses – the new economy – have displaced oil refineries, manufacturers and banks in the top three spots.
PetroChina, the country’s largest oil producer, is the sole resources-related company among Asia’s top 10, occupying the seventh spot with US$190 billion in capitalisation.
“The average valuation of China’s technology companies isn’t high compared with many US technology companies,” Tse said. “The Chinese internet market is just starting to pick up, and many people believe it still has a lot of room to grow.”
Alibaba, owner of the South China Morning Post, operates businesses in e-commerce, internet finance, cloud computing, film investments and logistics. The Hangzhou-based company’s second-quarter revenue rose 59 per cent, the strongest since its 2014 initial public offering in New York.
The shares of new-economy companies would be in a better shape than manufacturers and heavy industries to weather the slowing Chinese economy, said Tse.