China's Big Tech market cap rankings see shake up as NetEase overtakes Meituan for No 4 spot
China's Big Tech landscape continues to undergo seismic shifts, with video gaming and news portal NetEase overtaking food delivery giant Meituan as the country's fourth most valuable listed technology company, after Tencent Holdings, PDD Holdings and Alibaba Group Holding.
NetEase's market cap stood at HK$563.2 billion (US$72.1 billion) in Hong Kong on Thursday, compared with Meituan's HK$510.5 billion. On Wednesday, the gaming giant's shares grew 1.7 per cent, driving its market cap up to HK$542.5 billion, ahead of Meituan.
NetEase is now the fourth largest Chinese internet company by market cap, after gaming and social media giant Tencent, PDD, the owner of Pinduoduo marketplace in China and Temu overseas, and e-commerce titan Alibaba, which owns the South China Morning Post.
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Representatives from NetEase and Meituan did not immediately respond to a request for comment.
Tencent still tops the list with a market cap of HK$2.9 trillion in Hong Kong on Thursday. PDD, listed in Nasdaq, had a market cap of US$194.5 billion at the end of the most recent US trading day, higher than Alibaba's HK$1.4 trillion (US$181.6 billion) at the close of Hong Kong trading on Thursday.
PDD overtook Alibaba in late November, after posting better-than-estimated quarterly revenues thanks to the rapid expansion of the Temu app. The development even prompted Alibaba founder Jack Ma, who is no longer involved in day-to-day operations, to congratulate the "decisions, execution and efforts" of his rival.
Although Meituan's revenue in the third quarter ended September 30 rose 22 per cent year on year to 76.5 billion yuan (US$10.7 billion), chief financial officer Chen Shaohui warned that sales growth in its core business might slow in the current quarter due to unseasonably warm weather that may reduce meal orders for the period.
A food delivery courier for Meituan seen in Beijing, China, September 1, 2023. Photo: Simon Song alt=A food delivery courier for Meituan seen in Beijing, China, September 1, 2023. Photo: Simon Song>
At least 30 brokers slashed their 12-month target price for Meituan by as much as 49 per cent last month, with JPMorgan nearly halving its price target to HK$100 and downgrading its rating to neutral from overweight. Morgan Stanley slashed its target by a third to HK$120, although most analysts maintained a buy rating on solid fundamentals.
NetEase, which reported a revenue growth of 12 per cent to 27.3 billion yuan in the third quarter, is enjoying momentum as the gaming market continues to recover after Beijing eased its regulatory crackdown. The National Press and Publication Administration approved 87 new video game titles in November, bringing this year's total to 873. By comparison, there were 512 titles approved in 2022 and 755 in 2021.
Among the approved titles were NetEase's Chinese-language mobile game Shijiezhiwai. More than 2.1 million players have already made reservations for its launch, according to the game's official website, which did not provide a release date.
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2023 South China Morning Post Publishers Ltd. All rights reserved.
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