January 11, 2018 10:00 am JST

Tencent and Alibaba top Asia's market cap ranking in 2017

The region boasts a third of global value, but few new companies made the list

YUSHO CHO, Nikkei staff writer

SHANGHAI Tencent Holdings and Alibaba Group Holding were far and away the most valuable companies in Asia at the end of 2017. Reflecting the healthy growth of China's internet economy, the market value of both these companies more than doubled, vastly outpacing the average growth of 28% for Asian companies as a whole.

The region's market cap stood at $25.74 trillion at the close of last year, accounting for 31.8% of global total. Although the share is down from the 2015 peak of 32.2%, it recovered 1 percentage point from 2016. Asia now has 4,085 businesses worth at least $1 billion, making up 46.5% of the world's total.

Thirteen of the 50 most valuable Asian stocks in dollar terms are in telecommunications and IT, accounting for 40% of the total market capitalization of the companies on the list.

Tencent's WeChat social media platform has nearly a billion users, while second-place Alibaba's strength lies in e-commerce. Both companies have enjoyed meteoric growth, thanks partly to the government largely closing off the internet sector to foreign participation.

Tech companies outside mainland China also fared well. South Korea's Samsung Electronics slipped to third place in 2017 from first a year earlier, but its value grew nearly 50%. Chip foundry Taiwan Semiconductor Manufacturing Co. ranked ninth.

Greg Roh, analyst at Hyundai Motor Investment & Securities, believes chip supply will remain tight through 2019. Wafers are expected to be in short supply as well, making it "difficult to increase semiconductor capacity as much as desired, with the exception of tier-one chipmakers or foundry companies," Roh said in a note, suggesting that favorable conditions will continue for Samsung and TSMC.

Although China leads the pack by a large margin, with 26 businesses in the top 50, Japan is also well-represented, with 14 companies. Its top entry is Toyota Motor in seventh place, while Honda Motor ranked 32nd, reflecting the continued competitiveness and brand strength of the nation's auto industry.

But aside from certain tech companies, the Asian top 50 ranking has not changed much over the last decade. More than half of the 40 Chinese and Japanese businesses on the list in 2017 were also on it in 2007.

Listed arms of major state-owned enterprises, particularly in finance and energy, dominate the Chinese entries, for example Industrial and Commercial Bank of China (ICBC), China Life Insurance and PetroChina.

The situation is not that different for corporate Japan, where megabanks and former state monopolies have hung on. Though Mizuho Financial Group dropped off the list, Mitsubishi UFJ Financial Group and Sumitomo Mitsui Financial Group made it. Nippon Telegraph & Telephone (NTT) and Japan Tobacco were once state-owned, and the Japanese finance ministry is still legally required to hold a third or more of their outstanding shares.

Nikkei Asian Review editor Kenji Kawase in Tokyo contributed to this story.

Asia300

Industrial & Commercial Bank of China Ltd.

China

Market(Ticker): HKG(1398)
Sector:
Industry:
Finance
Major Banks
Market cap(USD): 379,577M
Shares: 356,406M
Asia300

China Life Insurance Co. Ltd.

China

Market(Ticker): HKG(2628)
Sector:
Industry:
Finance
Life/Health Insurance
Market cap(USD): 125,830M
Shares: 28,264.7M
Asia300

PetroChina Co., Ltd.

China

Market(Ticker): HKG(857)
Sector:
Industry:
Energy Minerals
Integrated Oil
Market cap(USD): 243,213M
Shares: 183,021M
Asia300

Tencent Holdings Ltd.

China

Market(Ticker): HKG(700)
Sector:
Industry:
Technology Services
Internet Software/Services
Market cap(USD): 549,662M
Shares: 9,499.06M
Asia300

Alibaba Group Holding Ltd.

China

Market(Ticker): NYS(BABA)
Sector:
Industry:
Retail Trade
Internet Retail
Market cap(USD): 470,412M
Shares: 2,555.89M
Asia300

Samsung Electronics Co., Ltd.

South Korea

Market(Ticker): KRX(005930)
Sector:
Industry:
Electronic Technology
Telecommunications Equipment
Market cap(USD): 332,919M
Shares: 147.34M
Asia300

Taiwan Semiconductor Manufacturing Co., Ltd.

Taiwan

Market(Ticker): TAI(2330)
Sector:
Industry:
Electronic Technology
Semiconductors
Market cap(USD): 225,290M
Shares: 25,930.4M
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