Lai See

Investors have got the message on Tencent

It has the most humble of names, but that has not prevented it from rising to the top 10 on the Hong Kong stock exchange in a little over five years.

Social network operator Tencent Holdings became the No10 firm in Hong Kong yesterday, thanks to a rally in the past quarter that raised its market capitalisation past HK$290 billion. It is also the best performing blue chip this year, with a 219 per cent gain so far.

Hitting a fresh high for the 11th time in the past three months, Tencent closed at HK$159.60, 43 times its listing price of HK$3.70 in June 2004.

At that valuation, Tencent is now worth more than China Unicom or Cheung Kong (Holdings), or about twice as big as Hong Kong Exchanges and Clearing, and three times the size of Hongkong Electric Holdings.

China's No1 instant messenger firm, with 484 million active account holders, is trying to persuade more users to take up subscriptions, as more than 10 per cent of them are paying for non-game services, according to Deutsche Bank, which upgraded Tencent to HK$177 on Thursday.

Perhaps only Google has the kind of exponential growth that can be compared to Tencent in the past five years. At present, Tencent is one-fifth the size of Google, whose shares have almost doubled this year, but the gap is likely to get smaller if the current momentum continues.

Sharing love with a comb

Looking at Tan Chuanhua, you would never guess what his great passion in life is. The balding Carpenter Tan Holdings chairman loves wooden combs.

At yesterday's launch of his Chinese handicrafts maker's initial public offering, he began his address by saying: 'I love combs, and combs love you, too.'

He went on to insist that a comb is a must for relationships.

'When a man loves a woman, he buys her a comb. When a son loves his mother, he buys her a comb. When a friend buys you a comb, it means friendship forever.'

Carpenter Tan is the first social enterprise seeking a listing on Hong Kong's main board. More than half of its employees are handicapped workers, including chairman Tan, who lost his right hand in a dynamite accident.

Unfortunately, we were unable to find out what his other passions are, as he did not take any media questions.

Chinese eyes on Red Devils

Grandtop International Holdings chairman Carson Yeung Ka-sing (below) might be the first Chinese to buy an English Premier League team, but he may not be the only one soon.

For the past two days, the media world has been speculating about a group of unnamed Chinese tycoons who were said to be putting together a ?1 billion (HK$12.59 billion) bid to buy Manchester United from American owner Malcolm Glazer.

According to Britain's News of the World newspaper, a group of six billionaires, including two who are keen Manchester United fans, have visited Old Trafford twice this year and spent three months putting together a deal to buy arguably the world's biggest football club.

The consortium, based in Bangkok, has secured all the finances and is now ready to table a deal that they hope is too good to be rejected by Glazer and his family, who are under pressure to service their mounting debts.

The Glazers guaranteed a loan for the club, which was to pay back a ?660 million debt to its bondholders by August next year.

If they fail to meet the deadline, then they have to pass majority control to three New York hedge funds - Citadel, Och-Ziff Capital and Perry Capital.

Merrill scorecard slips

Avoid Merrill Lynch, but stick with Macquarie. That's the conclusion from the post-initial public offering underwriters' report card this year.

According to research by the Financial Times, which monitored the first-day performance of Chinese companies listed in Hong Kong this year, half of the six share offers Bank of America Merrill Lynch sponsored dipped on their debuts.

That was the worst percentage among its banking peers - UBS had five out of 11 sponsored deals debut underwater, while JP Morgan, Credit Suisse and Deutsche Bank each had two negative debuts out of five.

Merrill's worst deal was China South City Holdings, which dropped nearly 23 per cent on its first trading day, in September.

Overall, Merrill-sponsored listings have risen an average of 2.6 per cent year to date, while Macquarie saw its eight flotations rise an average of 51 per cent, topping Citigroup's 41 per cent.