Internet executives were busy quashing a number of rumors on their microblogs this week, with smartphone sensation Xiaomi trying to stamp out reports of bitter relations with SNS giant Facebook (Nasdaq: FB), and e-commerce giant Alibaba (NYSE: BABA) quashing talk of a major new investment in South Korea. But some of the more interesting chatter focused on the concept of company valuations, and just how widely such valuations can vary for China's dynamic tech firms.
At the same time, a coming flurry of year-end parties began to kick off in the run-up to the Chinese New Year holiday that's just a month away. The microblogging realm saw e-commerce giant JD.com (Nasdaq: JD) singing its own praises at the company's annual party, taking a shot at fast-fading rival Dangdang (NYSE: DANG) in the process. At around the same time, a stumbling Sina Weibo (Nasdaq: WB) also held an annual awards ceremony for notable microbloggers, in its own attempt to remain relevant in the social networking realm.
Let's begin this week's microblogging round-up with the valuation talk, which was sparked by some comments made by Wei Jianglei, senior vice president of leading web portal Sina (Nasdaq: SINA), and some responses by Li Dongsheng, chairman of leading TV maker TCL (Shenzhen: 000100). To put things in perspective, China's three leading Internet companies by valuation are Alibaba, Tencent (
0700.HK) and Baidu (Nasdaq: BIDU), with respective values of US$240 billion (HK$1,860 billion), US$185 billion and US$77 billion.
By comparison, Lenovo (
0992.HK), which is the world's largest PC maker and one of China's largest tech firms by sales, only has a market value of about US$14 billion. The picture grows even dimmer for TCL (Shenzhen: 000100), which is worth just US$6 billion, even though it's one of the world's largest TV makers. By comparison, the much younger smartphone superstar Xiaomi received a lofty valuation of US$45 billion when it raised new funds earlier this month, making it nearly 8 times more valuable than TCL.
Sina's Wei Jianglei got the valuation discussion started when he puzzled over TCL's purchase earlier this month of the faded Palm brand, which was once a smartphone pioneer but later
fell into obscurity. He compared TCL to Lenovo, the latter of which has used a similar brand acquisition strategy to go global but has been more successful and is now worth twice as much as TCL.
