From: Who is the first giant in China's Internet industry?
For rational financial elites, quantitative financial report data is the best argument and answer. Because Alibaba and Tencent are both listed companies, it becomes easier to solve this problem.
In the Ali department, the two most important sectors are the listed company Alibaba Group and the unlisted Ant Financial, while the Tencent department is mainly concentrated in the hands of listed companies.
Now let's compare vertically and horizontally, how the 18-year-old Tencent and the 17-year-old Ali have won and lost. Among them, the horizontal performance comparison is based on Ali's financial report for the second quarter of fiscal year 2017 (July 1 to September 30, 2016), while Tencent's financial report is for the second quarter of 2016 (April 1 to June 6). 30 March).
One, market value: 320 billion VS 246.5 billion
There is no simpler and cruder quantitative indicator of listed companies than market capitalization.
At present, the market value of Alibaba Group listed in the United States is about 244 billion US dollars, and according to the current exchange rate, the market value of Hong Kong-listed company Tencent is 246.5 billion US dollars.
Yes, it seems that Ali's market value is similar to Tencent's. However, if you look at the entire Ali system, you can't ignore China's most valuable unlisted company, Ant Financial.
The unlisted Ant Financial has no market value and can only look at the valuation. At the end of last month, foreign media quoted the research of Liang Xiangyi, the head of the telecom and Internet research department of CLSA in Hong Kong, saying that the valuation of Ant Financial was about 75 billion US dollars. , and the core of which is the Alipay valuation of 50 billion US dollars.
The two are simply added together, and the combined market value of the two largest sectors of Ali is as high as 320 billion, surpassing Tencent. Of course, Ali's valuation already includes the value of Ant Financial, so the overlap between the two should be reduced. However, since Ant Financial has gone through several rounds of financing, the current proportion of Ali Group is unknown.
In fact, as early as September 2014, when Alibaba went public, Alibaba’s market value reached $230 billion. At that time, the market value surpassed that of Tencent and Baidu combined.
In the past two years or more, Ali's performance has been growing rapidly, but the market value has not increased synchronously.
In fact, it is not surprising that whether it is the investment giants on Wall Street or the financial elites in Hong Kong's Victoria Harbour, sometimes their understanding of Internet companies is much less than that when they analyze companies. They are demanding about short-term performance. than the prospect of long-term benefits.
Even Warren Buffett, the "god of investment" that Wall Street collectively worships, has kept aloof from all Internet company stocks because he doesn't know much about the Internet. Perhaps because of Buffett's potential influence, the entire Wall Street has almost always underestimated Internet companies, not only some. Alibaba, a Chinese stock company, also has American companies such as Facebook and Google.
For example, both Facebook and Ali, which both released financial reports last night, have their performance expectations both underestimated by Wall Street.
Second, revenue, profit, cash flow
Let's look at revenue and profits, after all, companies that don't make money are unethical.
In terms of revenue, the operating income of Alibaba and Tencent are basically the same.
Looking at revenue first, Alibaba Group's revenue increased by 55% year-on-year to 34.292 billion yuan, while Tencent's total revenue was 35.691 billion yuan, an increase of 52% over the same period last year. Tencent's revenue was slightly higher, and Alibaba's growth rate was slightly ahead. the same order of magnitude.
Looking at profits, generally speaking, the accounting methods of US-listed companies and Hong Kong-listed companies are also different.
In mature capital markets such as the United States, EBITA (earnings before interest, tax, depreciation and amortization) is a more important factor, because EBIT is mainly used to measure the profitability of a company's main business, so that investors can evaluate projects without considering projects. Applicable income tax rates and financing costs, so that investors can put projects in different capital structures to investigate and compare the performance of similar companies.
In the second quarter, Ali's EBITA increased by 42% year-on-year to 14.593 billion yuan.
In mainland and Hong Kong stocks, net profit is more important. In the second quarter, Tencent's net profit increased by 32% to 10.737 billion yuan.
In fact, it is more interesting to compare the revenue and profits of the two companies vertically. I quoted a ready-made comparison chart on the Internet, and the comparison is as follows:

As can be seen from the above figure, in the past few years, Alibaba's revenue has been killed by Tencent, but the gap between the two has been narrowing.
The most interesting thing is actually the profit. In 2009, when Tencent's net profit was as high as 5.2 billion, Ali lost 500 million in fiscal year 2010 (April 1, 2009 - March 30, 2010), but in the next five years , Ali's profit growth rate has been killing Tencent, and finally surpassed its old rival Tencent in fiscal year 2015.
In fact, it is not surprising. For the social game giant Tencent, which is a C-end business, the growth of social users is basically driven by itself. Profitable, and Ma Huateng has been running smoothly since he started his business in 1998.
Compared with Tencent, Ali's ups and downs development history, just like Jack Ma's entrepreneurial history, has many trials and tribulations. Alibaba needs to build various infrastructures such as logistics, payment, and information flow to become an e-commerce business, and it needs to mobilize multiple buyers, sellers, logistics and other forces. The investment is high, the return is slow, and the hardships behind it are hard to understand if you don’t participate in it yourself. But once all the infrastructure is built, the sharing and win-win mechanism is straightened out, the business chain is clarified, and potential energy is formed, it will accumulate and start to make money, so it is not surprising that profits skyrocket.
The financial elites on Wall Street are obsessed with the profits of listed companies. However, for companies that focus on long-term development, cash flow is more important to a certain extent. This is very important for Alibaba and Tencent, which are acquiring new businesses and at the same time giving blood to innovative businesses.
Ali's free cash flow in the quarter was as high as 139 yuan, while Tencent's free cash flow in the second quarter was 9.748 billion yuan. With abundant cash flow, Alibaba can invest around the land, build a moat, and support the development of innovative businesses with blood transfusions. For example, Alibaba Cloud has cut prices 17 times a year, and the price has risen sharply, of course, because the group company has money.
Today, almost half of China's Internet is dominated by Tencent and Ali.
3. Mobile terminal layout and next-generation revenue engine
It is quite interesting that GMV, which was talked about by Ali in the past, was not announced in this financial report. This is the first time that Ali has not released GMV data in the financial report since its listing. As early as June, Jack Ma said to the public that in the quarterly financial report released by Ali, GMV, an important indicator of e-commerce, will no longer be announced. Behind this is actually the beginning of Ali's de-e-commerce.
Why go e-commerce? In fact, it is the slowdown in the growth rate of the main business, whether it is the transaction volume or the growth rate of active users, this is true for Tencent and Ali.
Then the next thing to look at is whether its subsequent revenue and profit engines have kept up. There are two main considerations, first, the proportion of mobile business, and second, the increase in innovative business.
Look at mobile first.
For Tencent, WeChat is the ticket to the mobile Internet era. In the second quarter, the combined monthly active users of WeChat and WeChat reached 806 million, a year-on-year increase of 34%. In terms of active users, Tencent won.
Let's look at Ali's mobile users. In the second quarter, China's retail platform mobile monthly active users increased to 450 million, a net increase of 23 million compared with the previous quarter, a year-on-year increase of 30%; however, the proportion of mobile users with Tencent, Ali's users , is a natural transaction user with real money and is closer to commercial realization. Therefore, although the absolute number of users is very important, it is not comprehensive to only consider this indicator.
The more important indicator is actually the commercial monetization ability of the mobile terminal. According to Ali's financial report, the mobile terminal currently contributes 78% to the company's retail platform sales in China, and the growth is very strong. Ma Huateng revealed that most of Tencent's traffic and about 80% of its revenue come from mobile platforms.
Therefore, considering this dimension, both Tencent and Ali have obtained the ticket of the mobile Internet.
Look at the innovative business layout. If Ma Huateng is a top product manager who can create perfect products, then Ma Yun is a top strategist who is good at strategizing.
Jack Ma once said, "Alibaba's first major sector, e-commerce, is doing quite well. From 2017 to 2019, it will be the turn of Internet finance (Ant Financial) to take the stage. From 2019 to 2021, Alibaba Cloud will play the leading role. From 2021 to 2024, Cainiao will take the lead, followed by cross-border trade." These three major sectors, in Ma Yun's plan, must be completed before 2024.
Some of these innovative businesses are based on e-commerce, such as Cainiao and cross-border trade, and some are completely independent of e-commerce business, such as Alibaba Cloud. From this dimension, Alibaba's follow-up business layout is quite clear at present.
Fourth, internationalization
Let's look at internationalization. The internationalization of Ali and Tencent has two paths. First, the internationalization of the group's internal business. Second, buy buy buy, global investment mergers and acquisitions.
In terms of the internationalization of internal business, Alibaba’s business almost killed Tencent.
Internationalization is the three major business focus of Ali after listing. AliExpress has performed well in Russia and Latin America. In the first half of this year, Ali invested 1 billion US dollars to control Lazada, the largest e-commerce company in Southeast Asia, and also invested in India's "Taobao".
On October 20, the 2016 Tmall Double 11 was officially launched in Hong Kong. Alipay and Tmall jointly announced that Alipay has formed the ability to "globally receive global payments", which can provide services for users in more than 200 countries and regions around the world. 18 currencies are supported for settlement. This year's Double 11, global users can buy and buy on Tmall, Taobao or AliExpress through Alipay. And Alibaba Cloud is also internationalizing. At present, Alibaba Cloud has surpassed Google Cloud and is second only to Amazon's AWS and Microsoft's cloud computing. Just a few days ago, Ant Financial teamed up with the richest man in Thailand to create a Thai version of Alipay.
By the end of last year, Cainiao had become partners with about 50 well-known international logistics companies around the world, and its delivery capacity covered 224 countries and regions around the world. Hourly, 72-hour delivery worldwide.
Therefore, Ali has been listed for more than two years, and its internationalization has been successful.
In fact, WeChat has already begun its international exploration, but in the global market, WeChat's international version, WeChat, has been crushed by a WhatsApp with only fifty or sixty technical employees.
At present, WeChat ranks first in the global social rankings only in China and Macau, while WhatsApp ranks first on the social rankings in more than 100 countries around the world, so the latter's social status is basically unshakable.
In the previous paragraph, I interviewed Clay Sherkey, an Internet thinker in Silicon Valley and the author of Cognitive Surplus, whom Ma Huateng particularly admired. He lived in Shanghai, China for the past two years and downloaded WeChat, but he still kept WhatsApp because he was abroad. My friends, very few people use WeChat or WeChat.
Due to the networked nature of social networking, people's choice of social software is passive - if your social circle is in WeChat, you can't switch to a new social software, so at present, WhatsApp's advantages in the global market, WeChat There is basically no possibility of further shaking. Therefore, it can be said that there is only one road to globalization of Tencent's main business, and that is to implement global business through overseas mergers and acquisitions.
There is also a soft indicator of internationalization. In fact, it is to compare the global influence of Ma Yun and Ma Huateng. In this regard, Ma Yun, who is an English teacher, can kill the low-key technical man Ma Huateng in seconds in the political and business circles. Of course, Ma Yun’s Part of global social networking is also for Ali's global expansion.
Jack Ma’s friends are really all over the world, serving as the special advisor to the United Nations Conference on Trade and Development for Youth Entrepreneurship and Small Businesses, laughing with the Obama White House, taking a photo with Cameron and posing with scissors, offering suggestions for Putin to develop e-commerce in Russia, and meeting at Alibaba headquarters. The prince, the head of state, the president and the prime minister are all so easy. In short, Jack Ma has become the Jack Ma of globalization, while Ma Huateng is still Ma Huateng.
It is undeniable that Tencent and Ali are not only the top Internet companies in China, but also the world's first-class Internet companies. They stand on the big wind of China's Internet. They have incomparable advantages in combination of fortune and strength. The financial report is only a quantifiable present. Who are you more optimistic about in the future?