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Who can Alibaba and Tencent take the lead in getting tickets for a club with a trillion market value?

via:博客园     time:2020/7/10 16:45:28     readed:189

股市,马云,马化腾,市值

The article comes from: American Stock Research Society, author: American Stock Research Society, pictures from

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On the morning of July 7, Alibaba rose 3.46% and its market value exceeded 5 trillion Hong Kong dollars, surpassing Tencent's market value of 4959.131 billion Hong Kong dollars, returning to China's largest company by market value. So far, Alibaba's share price is 4987.719 billion Hong Kong dollars, Tencent's share price is 4930.465 billion Hong Kong dollars, Ali still occupies the first place in the Internet market value.

A few days ago, on June 29, Tencent won the first prize in China capital stock market value with HK $4.64 trillion, surpassing Alibaba's HK $4.48 trillion. As the two leading players in China's Internet industry, the market value of Alibaba and Tencent are both at a record high level. They take turns to sit in the first place in the market value of China capital stocks, and other Internet giants are still out of reach.

In the Internet industry, the stock price performance of Alibaba and Tencent has been compared repeatedly. Why is the battle of the first market value of China capital stock always staged? According to the US Stock Research Institute, the battle between Alibaba and Tencent over the first market value of China's capital stocks is likely to continue. With both giants working at the b-end, who can enter the gate of trillion dollar market value between Alibaba and Tencent in the future?

Alibaba and Tencent take turns to top the market value

For listed companies, the market value is the wind vane of capital and company analysis, and the change of stock price objectively shows the attitude of investors to the company. In the Internet industry, the stock price performance of Alibaba and Tencent has great reference value. The stock prices of the two giants represent the highest level of the domestic Internet industry.

Since the beginning of this year, Tencent's share price has risen in shock, with an increase of nearly 30% in the year. From March, its share price has risen from HK $330 to HK $516, an amazing 56%. This year, Alibaba's share price performance is relatively calm, with the share price rising less than 5%. Given that this year's long rally has been a major negative, it is still not a positive result.

Alibaba and Tencent share price rise difference, perhaps still affected by the last quarter's results. The first quarter of the outbreak of domestic epidemic, Ali and Tencent Financial performance report card performance is different.

In the first quarter, Alibaba's revenue was 114.3 billion yuan, a year-on-year increase of 22%, exceeding the market's expected 107.038 billion yuan; the non GAAP net profit was 22.3 billion yuan, up 11% year-on-year. Although they all maintained a certain year-on-year growth, this performance still declined a lot compared with previous quarters.

According to the financial report, Tencent's revenue in the last quarter was 108 billion yuan, up 26% year on year; its net profit was 27.079 billion yuan, up 29% year on year, both exceeding market expectations.

Obviously, Tencent's performance in terms of revenue and net profit is better than that of Alibaba in the last quarter. Alibaba's core business e-commerce was greatly impacted by the epidemic in the first quarter. During the epidemic period, users spent more time at home, which was conducive to Tencent's online game business performance, which also led to Tencent's performance.

Fortunately, however, the epidemic situation in China has improved, and Ali's e-commerce business has also recovered rapidly. The 618 Shopping Festival in the first half of the year is expected to drive the performance of Ali's e-commerce business. From the recent stock price performance chart of the two companies, the trend is still very optimistic, and many analysts are optimistic about the two companies, which is why Alibaba and Tencent will take turns to take the top position in terms of market value.

In the field of e-commerce and social networking, Alibaba and Tencent respectively occupy absolute market share, which is also an important reason to stabilize their stock price performance. Looking back on the market value performance of Alibaba and Tencent in recent years, the two sides rarely open the gap in market value for a long time, and they will continue to play each other in the future.

Although they are at the top of the domestic Internet industry, Alibaba and Tencent are not too high and cold. If you take a close look at the development of these two companies, there are some hidden dangers behind the high market value.

Under the fierce competition, Ali and Tencent have unspeakable anxiety

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In the Internet industry, although the outside world often compares Alibaba with Tencent, the two companies are rarely forced to do so. Alibaba and Tencent are located in the track of e-commerce and social networking. Although they are not positive competitors, according to the ecological layout of the two giants, they are actually in asymmetric competition in many fields.

It can be said that in addition to the core business, Alibaba and Tencent are increasingly competitive.

Alibaba's core business includes: China's retail business, cross-border and global retail business, China's wholesale commerce, cross-border and global wholesale commerce, logistics services, life services, etc. Tmall, Taobao, rookie network, hungry Mo and flying pig belong to different categories. The three major sectors include cloud computing, digital media and entertainment, and innovative business.

Tencent's core businesses include: network / mobile games, community value-added services and applications, online advertising, and other divisions, mainly including payment related services, cloud services and other services. The three sectors include: cloud services, online games, social networking and other advertising revenue.

Compared with Tencent's business, Alibaba is in a positive competition in cloud computing and entertainment business. In the past two years, both Alibaba and Tencent have focused on the b-end market. According to the financial results disclosed by the two companies in the last quarter, they have published some data on their b-end business. In terms of Tob business, both companies are making efforts, Alibaba cloud is benchmarking Tencent cloud, but Alibaba should be far ahead of Tencent in the development of b-end market.

The growth of financial technology and cloud services, which accounted for 25% of Tencent's total revenue, slowed down, with a year-on-year growth rate of only 22%, compared with 44% in the same period in 2019. Tencent did not disclose the revenue data of cloud service business separately in the last quarter. According to the 2019 annual report disclosed by Tencent on March 8, the annual revenue of Tencent cloud in 2019 exceeded 17 billion yuan, with an increase rate of 87%, accounting for about 17% of the total revenue of financial technology and enterprise service business.

In the last quarter, Alibaba's Alibaba cloud revenue reached 12.2 billion yuan, a year-on-year increase of 58%, with a significant growth on a month on month basis. For the second consecutive quarter, Alibaba's revenue exceeded the 10 billion mark. On March 20, canalys, a British research organization, released a report on China's public cloud service market in the fourth quarter of 2019. According to the report, Alibaba cloud ranked first and its market share rose to 46.4% month on month. Over the same period, Tencent cloud market share was 18%, baidu cloud share was 8.8%. In the Asia Pacific region, Alibaba cloud also ranks first in the Asia Pacific market.

Although Alibaba is ahead of Tencent in the development of cloud computing, in the field of e-commerce and takeout, Tencent's Jingdong, pinduoduo and meituan are all direct competitors of Alibaba. Take pinduoduo as an example. Although its current volume is not as large as that of Taobao Jingdong, its annual transaction volume has exceeded 1 trillion, and the number of users has reached 630 million, far surpassing that of Jingdong and directly approaching Taobao 680 million.

The sinking market of pinduoduo is expanding within the Fifth Ring Road. Jingdong Logistics has highlighted its advantages during the epidemic. Meituan's local life service market share is more than half. Meituan once shared the same position with meituan. However, after being acquired by Ali for two years, meituan has been far ahead of hungry. These three companies surround Alibaba's core business.

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Although the core business of Alibaba and Tencent avoid direct confrontation, we also see that the competition between the two companies in other fields is not weakened, and even the fierce smell of competition in other businesses is intensifying. In addition to facing competition, the rise of other external forces also brings them greater anxiety. The competitive pressure brought by this anxiety may also affect the stock price performance of the two companies.

Ali anxiety flow

In the field of e-commerce, Ali can be in an absolute position because he has grasped the b-end merchants and the infrastructure of e-commerce, and has set up a high enough moat in these two fields. However, with the popularity of infrastructure such as logistics all over the country, Ali's advantages in this respect are not prominent enough. For Ali, in order to consolidate the advantages of e-commerce, the importance of traffic is self-evident. In recent years, Alibaba's new retail strategy also wants to tap the growth of offline traffic. Therefore, the core of the competition changes from the realization of back-end traffic to the acquisition of traffic itself.

In terms of user traffic acquisition, Alibaba has always been lack of C-terminal gene, and has not successfully launched its own platform in such traffic platforms as social networking, search and short video. As a result, he can only obtain traffic through external acquisition or investment, which is the purpose of taking a stake in Weibo and xiaohongshu. Now tiktok is also covying with Kwai TSE's live broadcast bonus as the rise of short video, which is also a big threat to Ali.

Tencent's anxiety byte leaps and rises

In terms of competition, Tencent's current anxiety may come from byte skipping. With its rapid rise, Tencent can't stop it. At present, byte beating has tiktok, jitter, watermelon video and so on. In China, tiktok is active, with users breaking 400 million, and occupying younger users.

In particular, byte hopping has stood on the highland of short video, and has directly looked beyond Tencent to the world. In July 1st, according to the latest global App list released by Sensor Tower platform, the downloads and overseas version of TikTok were downloaded 626 million times in the first half of this year, ranking the tiktok in the world. Over the same period, it generated $421 million in revenue from apple and Google systems, ranking third in the world.

In addition to short video, byte jump is also ambitious to set up a game department, which will compete with Tencent's hinterland. In March last year, Beijing Chaoxi guangnian, a wholly-owned subsidiary of bytecomb, which is in charge of the game business, reached an agreement with Sanqi mutual entertainment to acquire 100% equity of the latter's subsidiary, Shanghai Mo Lin, which is regarded as an important step in the game field. According to these levels, Tencent still has a lot of hidden dangers in the face of byte hopping.

According to the development of Alibaba and Tencent, although their respective fundamentals are stable enough to bring investors a lot of growth space, the problems they are facing are also obstacles affecting them. In order to open the gap with each other in the future, both Alibaba and Tencent urgently need to open up new growth points. Can cloud computing shoulder the heavy responsibility?

Alibaba and Tencent, who will step into the gate of trillion dollar market value faster?

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For Alibaba and Tencent, the current ambition may not only be limited to the domestic market, but the key is to break through a larger threshold in the future. So far, there are only four companies with a trillion dollar market value in the US: apple, Amazon, Microsoft and alphabet. Among the four companies, Amazon's main business is e-commerce, Microsoft mainly relies on providing system software and software services to make profits, alphabet focuses on Internet business, and Apple's main revenue comes from hardware.

Among them, cloud computing has not only become an important part of the revenue of Amazon and Microsoft's financial results, but also become an important reason to attract investors to support. This has also successfully enabled the market value of Amazon and Microsoft to break through the trillion dollar mark. So far, the market value of Amazon is 1.52 trillion US dollars, and that of Microsoft is 1.60 trillion dollars. For Tencent and Ali, in fact, they have such a possibility.

According to Gartner's data, the global cloud computing market has reached $64 billion in 2018, and is expected to increase to $246.1 billion by the end of 2020, with a compound annual growth rate of 18% between 2019 and 2023. As an important member of the new infrastructure base, cloud computing has attracted much attention, and has become one of the key tracks for the giants to seize the second half of the Internet from to C to to to B. Alibaba and Tencent are also making efforts in cloud computing.

According to the market value performance, Alibaba and Tencent still have the potential to break through the trillions of dollars in market value. But in the future, Alibaba and Tencent need to find the second growth curve as soon as possible if they want to break through the trillion dollar market value. At present, according to the performance of Alibaba and Tencent, cloud computing is expected. It is just who can achieve greater growth breakthrough in cloud computing business in the future, and seizing the commanding height in the b-end market may be the biggest driving force to stimulate the rise of its stock price.

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