Tencent becomes most valuable brand

Chinese Internet giant Tencent Holdings Ltd has overtaken long-time leader China Mobile as the most valuable brand in China, leading a group of technology-related private firms that moved upward on the branding list while surpassing State-owned enterprises (SOEs), a study showed Tuesday.

The brand value of Tencent is now $66 billion, up 95 percent from a year earlier, making it the most valuable brand on the list, global research agency Millward Brown said in its annual report Tuesday.

China Mobile, which had held the top spot since the ranking was launched in 2011, slid to third place in 2014 with a brand value of $56 billion, down 9 percent from the previous year, the report said.

Besides Tencent, private firms e-commerce giant Alibaba and search engine Baidu Inc were also among the top five most valuable Chinese brands in 2014.

Alibaba raised $25 billion on the NYSE in September 2014 from an IPO, the largest ever in US history. As of Tuesday, Hong Kong-list Tencent reported a market value of HK$1,274.4 billion ($164.4 billion).

When the study was first launched in 2011, the top five places were fully occupied by SOEs.

Regarding the top 50 brands over the past five years, the brand value of private firms has grown 278 percent, compared with 6 percent for SOEs, the report said.

Currently, the total value of the top 100 Chinese brands is roughly evenly split between private firms with 47 percent and SOEs with 53 percent, it said.

The result of the study was based on analysis of financial data from over 1,200 Chinese firms spanning 23 different sectors and interviews with more than 23,000 Chinese consumers, Doreen Wang, who is in charge of the study at Millward Brown, said at a press conference Tuesday.

"Indexes that reflect consumers' opinions have the same weight with indexes that reflect financial data in our value analysis," Wang said.

Some companies in China's State sector may have suffered a downturn amid a slowing economy, but compared with the fluctuation in its financial results, the key problem facing SOEs is credibility with consumers, Hua Rui, executive director at the China Corporate Culture Institute, told the Global Times on Tuesday.

Scandals about the SOEs such as recent reports about deposits at State-owned commercial banks having gone missing have tarnished the brand and image of the SOEs, Hua said.

The study from Millward Brown showed the brand value of the Agricultural Bank of China dropped 20 percent from the previous year to $15 billion, but didn't provide an explanation.

While SOEs provide a significant contribution to China's economy, the current data highlights the increasing competition SOEs face from the private firms, the report said.