Quick Take: Tencent’s Market Cap Exceeds $480 Bln as Stock Surges

Hong Kong-traded shares of China social media giant Tencent Holdings surged to a record high Friday after the company posted strong quarterly growth, pushing up the company’s market cap to HK$3.8 trillion ($486 billion).

Shares of Shenzhen-based Tencent, which runs the popular messaging app WeChat, climbed as high as HK$405 each in early trading Friday. The stock closed at an all-time high of HK$403.40, up almost 3% from the previous day.

So far this year, Tencent’s shares have climbed 114.6%.

Earlier this week, Tencent reported better-than-expected results for the third quarter, driven primarily by games, payment-related services, digital content subscriptions and sales, and online advertising.

Tencent reported a 61% rise in third-quarter sales to 65 billion yuan, with net profit gaining 67% to 18 billion yuan.

Several institutions including Citibank, Nomura Securities and HSBC upgraded Tencent’s stock rating after the financial reports.

Hong Hao, managing director and chief strategist at BOCOM International, said the rise of Tencent’s share price reflected investors’ growing confidence in the company’s profit model, which focuses on platform development.

Tencent’s Wechat app is growing into a ubiquitous social network in China, integrating a wide range of services such as payment, online shopping and ticket booking. The number of monthly active users of WeChat worldwide rose 1.8% to 980 million from the previous quarter, according to Tencent.