As some western Internet companies struggle, Tencent, the master in China’s soaring Internet market, is booming. From Paul Mozur and Juro Osawa at The Wall Street Journal:
The share price of Tencent Holdings Ltd., 0700.HK +1.47% China’s leading Internet company—with businesses from online gaming to instant messaging—has soared 48% this year in Hong Kong. Analysts expect that its results for the quarter ended June 30, to be released Wednesday, will show healthy growth, despite slowing online advertising outlays as the Chinese economy softens.
China is the world’s biggest market for online businesses, home to about a quarter of the world’s Internet users, according to the International Telecommunication Union, a United Nations agency. The country’s online market is dominated by Chinese companies, in part because government barriers restrict the likes of Google and Facebook.
“Not only does Tencent have a cash cow in its strong gaming business, but the company is also best-positioned in high-potential markets like social media and mobile Internet services,” said Jefferies analyst Cynthia Meng, who has a buy rating on Tencent’s stock.
For more on China’s Internet development, see Four Trends on China’s Internet, via CDT.