Tencent has clinched the honor of being the first Asian company to be valued over $500 billion. The company known for its messaging app WeChat and online games, outperformed the retail giant Alibaba, who was seen as a bigger contender for this coveted title.

$500 Billion Club
Photo by dflorian1980

$500 Billion Club

Alibaba was founded 19 years ago, while Tencent was founded a year later. Both of the companies expanded from their social media beginnings. The share price of both the companies doubled this year. Yet, it was Tencent, who became the first to enter the $500 Billion Club. Shares of the Hong Kong-listed internet giant soared to HK$420, totaling its market value to HK$3.99 trillion (US$693.59 billion) at the close, according to BusinessTimes. The stock doubled in value this year.

Other companies in the $500 billion club include Apple, Facebook, Alphabet, Amazon and Microsoft. The Chinese company is now closing in on the likes of Amazon and Facebook. Apple is at the top of the list, and many believe the iPhone maker will be the first to hit the $1 trillion mark. Alibaba is now the second largest in Asia with a market valuation of $474 billion.

Tencent’s entry to this elite club comes shortly after the company posted a profit of 18 billion RMB (US$2.7 billion) and revenue of 65.2 billion RMB (US$9.8 billion) for the third-quarter. The year-on-year profit increased 69% while revenue surged 61% on the back of the games business.

Can Tencent continue its run?

Despite the surge this year, analysts are optimistic of a further upward movement in the stock. Speaking to Bloomberg, Wang Menghai, a Shanghai-based money manager at Fullgoal Fund Management Co., said it would not be wise to sell the shares just for the short-term gains. Tencent’s WeChat, where people can chat, play games, post photos and transfer money along with paying for various services in China, has a user base of around one billion.

Some analysts are, however, cautious that the company may or may not be able to repeat its success story worldwide as it did in China. Tencent’s Senior Vice President, S.Y. Lau, on the other hand, states that the company wants to spread the Chinese culture worldwide rather than the other way round.

“What we’re aiming to create is ‘super IPs’ (intellectual property) that leverage our different businesses from upstream to downstream,” the executive told Reuters.

Apart from mobile gaming, Tencent is also foraying into digital content such as video and online advertising. The company is also looking to expand in the U.S., and has bought stakes in Snap and Tesla. The Chinese company is also spreading its operations in Malaysia. It recently acquired an e-payment license in Malaysia for local transactions. The service is expected to be launched next year, according to S.Y. Lau.

Tencent chairman Ma Huateng’s wealth increased to $48.3 billion on Tuesday morning making him the ninth richest man, according to Forbes Real Time Rankings of the World’s Billionaires. Ma is now richer than Google founders Larry Page and Sergey Brin as well as the Walton family, heirs to the retailer, Walmart. Ma, popularly known as Pony Ma, owns about 9% of Tencent.