When looking to a report published by the China Internet Network Information Center on Jan. 31st shows, the question isn’t whether China’s internet valuations are growing – it’s how much and how fast. The report shows that China’s internet companies pack some impressive punch, with public internet firms reaching a cumulative value of $1.42 trillion.
The report shows an increase in the number of listed firms increased 12% last year, topping out at 102. It comes as no surprise that Baidu, Alibaba, and Tencent took the top three spots, accounting for 73.9% of total market value, and 500 billion yuan, 2.9 trillion yuan, and 3.1 trillion yuan, individual valuations.
As of December 2017, there were 77 companies referred to as ‘unicorns’ or private startups valued over $1 billion. Of these 77 unicorn companies, 30% were e-commerce or Internet finance businesses – a perhaps not unsurprising figure.
46 out of 102 companies went public on domestic stock exchanges, 41 are listed on American exchanges accounting for 54.8% of the total market capitalization, and 15 are listed in Hong Kong. The report also chronicled the decision of some companies to privatize and return to domestic markets, lured by an improved financial situation at home. Meanwhile, others will remain abroad because of the high price-earnings ratio of the software industry in the Chinese securities market.
The report shows that online gaming companies represent 28.4% of listed companies, and e-commerce, culture and media, internet finance and software companies account for 14.7%, 10, 8%, 9.8% and 5.9% respectively.
Although top-tier cities remain the most attractive destinations for internet businesses, human resource benefits, industrial development and investment are set to lure other companies to regions outside of Beijing, Shanghai, Shenzhen, and Guangzhou thanks to innovation and an improved capital market.