HONG KONG Feb 17 China's Hong Kong-listed
Internet stocks are riding high thanks to an investment frenzy
by Chinese tech companies as core players spend to build the
foundations for future growth.
Tencent Holdings Ltd, China's social networking
and video games superstar, which is trading at an all-time high
with a market valuation of $131.8 billion, was up 5.3 percent in
mid-afternoon trading on Monday.
Beijing-based Kingsoft Corp Ltd, a software
development company with a market cap of $3.7 billion, surged
7.2 percent, set for its biggest gain in four months.
The jump came after last week's announcement that Xiaomi
Ventures, the investment arm of smartphone maker Xiaomi Tech,
paid $20 million for a 4.7 percent stake in Kingsoft's online
and mobile games subsidiary Westhouse.
Chinese video game company NetDragon Websoft Inc
and business software firm ChinaSoft International Ltd
were also up 10.39 percent and 3.88 percent respectively. The
Hang Seng Index was up 1 percent.
Tencent's gain came as speculation mounted in various
mainland China and Hong Kong media that it would make a $400
million investment for a 20 percent stake in Chinese
restaurant-review site Dianping. Officials with Tencent and
Dianping declined to comment.
Tencent shares are now up more than 16 percent on the year,
versus a 3.3 percent loss for the Hang Seng Index. In
2013, Tencent shares surged 99 percent as the Hang Seng
benchmark barely rose 3 percent.
Tencent shares are now trading at 38 times forward 12-months
earnings, a 40 percent premium to their historical median,
according to Thomson Reuters StarMine.
Tencent is expanding its social media empire beyond
messaging, games and stickers to encompass more smartphone
location-based services. The company already operates the hugely
popular mobile messaging app WeChat, or "Weixin" in China.
Tencent wants to allow people to use their smartphones to
interact with their surroundings and do things like buy goods
through WeChat Payment, Tencent's mobile payment platform, and
use the Didi Dache app, which it has a stake in, to book taxis.
A Tencent investment in Dianping would fit with this
strategy as China's Internet firms compete in an online land
grab for investments that can improve their location-based
Other companies making acquisitions include Alibaba
, which last week offered to buy digital map firm
AutoNavi Holdings Ltd. In January Baidu Inc
bought Renren Inc's remaining stake in Nuomi, a Chinese
group buying service similar to GroupOn Inc