Tencent turns from buyer to seller in investment pivot
Tencent is pivoting from years of aggressive stakebuilding to a focus on divestments as it comes under pressure from investors.
As part of an important shift in strategy, the company has outlined a soft target of divesting about Rmb100bn ($14.5bn) of its $88bn listed equity portfolio this year, according to two people familiar with the matter. This would take place depending on market conditions and internal profit targets.
Its new approach was not driven by any urgent need for cash, and sale proceeds could be distributed in a variety of ways, including special dividends for shareholders, share buybacks and bonuses for employees, the people said. Two employees who did not wish to be named said they had started receiving stock dividends this year in the form of $JD.com(JD.US$ shares.
While Tencent has already begun its divestment drive, one person said the investment team was still deliberating which stakes could be reduced in non-core businesses and at what target price. The group owns more than 10% of six large tech companies listed in China and is the biggest investor in $Meituan ADR(MPNGY.US$ , short-video sharing app $KUAISHOU-W(01024.HK$ and popular question-and-answer site $Zhihu(ZH.US$ .
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whqqq : It seems that it is actively taking measures to improve its earnings in the next quarter. Now it's rising, and I hope it will stay until next week.
Siausin : Choosing a bad time to divest when market is in turmoil with low volume . They should have waited for better times to carry out their divestment since it if not for cash need.
FeirreOP whqqq: