Strong user base in instant messaging and social networking services Favorable growth prospects of China's Internet industry Sound financial standing Intense competition and regulatory risks Long-term sustainability needs to be proved The rating on China-based Internet services provider Tencent Holdings Ltd. reflects our view that the company will retain its strong user base in its instant messaging and social networking services (SNS) in China. The favorable growth prospects of China's Internet industry and the company's sound financial standing further support the rating. Nevertheless, regulatory risks and intense competition in China partly offset the above strengths. And although Tencent has grown rapidly over the past two to three years, the company has yet to prove its long-term sustainability, in our view.
