Tencent Holdings and Samsung Electronics Co are racing to be crowned Asia's most valuable company as expectations for robust earnings growth push their share prices to record highs.
Their surge - both have gained by a third this year - has made them the world's best performing large cap tech stocks and highlights how these nimble Asian firms are thriving while rivals Apple Inc and Alibaba Group Holding have struggled.
"These companies can grow earnings despite weaker global growth http://www.cheapmlbjerseysphillies.com/aaron-nola-jersey/ ," said Andrew Gillan, head of Asia ex-Japan equities at fund managing firm Henderson Global Investors, which is overweight on Asian technology firms.
"The operating fundamentals of the Chinese Internet sector particularly have surprised positively in the most recent quarterly results," Gillan noted.
While many investors remain upbeat about Samsung and Tencent, some caution the firms are vulnerable to rapid swings in sentiment on any sign of slowing momentum. Samsung and Tencent have been more volatile than the Asia tech sector and the broader market this year.
On Wednesday, Samsung said sales of its latest flagship smartphone were outstripping supply http://www.cheapmlbjerseysphillies.com/maikel-franco-jersey/ , but second-half profits could still take a hit if production shortfalls are not fixed and a recovery in components demand fails to eventuate.
Moody's Investor Service also warned that Samsung's profit margins might narrow in the second half because of seasonal factors in the consumer electronics business and competitive pressures.
For Tencent, the market expectations that are driving shares higher are themselves a risk, according to Nomura.
A faster-than-expected slowdown in personal computer game revenue, aggressive spending and new products or business models from competitors could weigh on earnings, the bank warned.
Samsung and Tencent have added about $30 billion in market value since August 25, surging to all-time highs. Tencent is valued at $249 billion http://www.cheapmlbjerseysphillies.com/mike-schmidt-jersey/ , only 4 percent smaller than the most valuable Asian firm, China Mobile, at $259 billion. Samsung is now worth $239 billion.
Tencent is now the world's 12th biggest company by market value and Samsung the 17th largest one, Thomson Reuters data shows.
That's up from No.26 and No.33 respectively just five months ago, according to a PricewaterhouseCoopers ranking released on March 31.
Samsung shares' have significantly outperformed Apple's - the South Korean firm has leapt 50 percent over the past year, while the US company has gained 3 percent amid concern about weak sales in China.
The gap between Samsung's price-to-earnings ratio of 12.4 and Apple's 12.7 is now the narrowest since late 2011 http://www.cheapmlbjerseysphillies.com/ , although Samsung is still worth less than half Apple, according to Thomson Reuters data. Apple is now worth $586 billion.
Samsung's share price growth spurt comes after years of struggle in its smartphone business which left investors impatient for higher returns.
The firm revived mobile profits by restructuring its product lineup this year and is seeking ways to sustain earnings momentum. Buybacks and higher dividends have also boosted shares.
Tencent is significantly more expensive than Samsung. The Chinese Internet firm, whose popular WeChat messaging apps in China saw active monthly user numbers jump 34 percent in the second quarter, trades at 46.8 times earnings, closing in on Facebook's 59.
China's slowest economic growth in 25 years and some questionable acquisitions have clouded the outlook for Chinese e-commerce giant Alibaba, but Tencent has managed to thrive thanks in part to its focus on rapidly growing mobile gaming.
Tencent outshone peers including Baidu with a forecast-beating 47 percent jump in second-quarter profit http://www.cheapmlbjerseysphillies.com/aaron-altherr-jersey/ , after it diversified into areas such as music, video and advertising.
HSBC expects further earnings growth, driven by new income streams.
SAN FRANCISCO, March 30 (Xinhua) -- Much ado has been made about a proposed futuristic transportation system that is to take Californians from San Francisco to Los Angeles and back in under 55 minutes, after the company behind the idea said it would begin constructing a test track in 2016.
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So smooth, he told Xinhua recently, that Hyperloop Transportation Technologies hasn't needed any private funding since he kicked off the company in 2013.
"We are working right now with a team of over 200 people, all of them working in exchange of stock options for Hyperloop http://www.cheapmlbjerseysphillies.com/tommy-joseph-jersey/ , so we aren't actually paying them any money," he said. "At the end of 2015 we are going to raise 100 million U.S. dollars to construct the test track through a public offering, when private companies will be able to bid for the project."
The test track will be about eight kilometers long. However, since the revolutionary transportation system inspired by Paypal's co-founder Elon Musk has not been tried out empirically, critics doubt the project can actually run farther than the test track.
Also, trial tests will not run Hyperloop faster than 321 km per hour http://www.cheapmlbjerseysphillies.com/pat-neshek-jersey/ , raising doubts weather the final project would be able to meet expectations.
According to Ahlborn, once the test track is completed, developers will be able to figure out design flaws and functional elements. The CEO claimed to have recruited top engineers, some on pro bono basis for now, from the U.S. National Aeronautics and Space Administration (NASA) and European airplane builder Airbus.
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