Market Overview

A Look At What Asia's Largest Internet Company Owns

A Look At What Asia's Largest Internet Company Owns

Alibaba Group Holding Ltd (NYSE: BABA) was recently dethroned as being labeled China's most valued e-commerce company, despite its stock gaining more than 35 percent over the past year. The company that pushed its way to the number one spot is Tencent, an investment holding company with a focus on media, entertainment, internet, mobile phone and more.

Related Link: Alibaba Is No Longer China's Most Valuable Tech Company

Bloomberg took a deep dive into some of the companies that Tencent holds a stake in and noted six of the 11 companies Bloomberg tracks have proven to be a money losing investment for the holding company.

Tencent's most notable holdings include WeChat, an instant messaging service Tencent developed, and QQ, a social media platform also developed by Tencent that includes social games, music, shopping, microblogging and other services.

Bloomberg quoted Jialong Shi, an analyst at Nomura, who said that Tencent's investment strategy is to acquire minority stakes, which better allows the management of teams to "run the company" instead of "trying to integrate them."

Shi added that Tencent also has a reputation as being "flexible" in terms of the stake it seeks to acquire.

Tencent's Losing Investments

Tencent's biggest loser in its portfolio is Glu Mobile Inc. (NASDAQ: GLUU), the app maker behind the "Kim Kardashian: Hollywood" mobile game. Its stock has fallen nearly 60 percent since Tencent invested $126 million more than a year ago and bought 21.5 percent of the company.

Tencent's Winners

One of Tencent's biggest winners is the Chinese software maker Kingsoft, which gained 210 percent since Tencent's $115 million investment in July 2011. Another triple-digit percentage winner is Activision Blizzard, Inc. (NASDAQ: ATVI), which gained 135 percent since Tencent's 2013 investment gave it a 5.023 percent ownership stake.

Within the e-commerce space, Tencent holds a 21.25 percent stake in Alibaba's chief rival, JD.Com Inc(ADR) (NASDAQ: JD), as its stock gained around 36 percent since an investment was made in 2014 — although, it has trailed Alibaba's superior returns.

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