Tencent Responds to Reports of $14.5B Stock Divestment Plan
After Tencent clarified rumors that it will sell all or most of its shares in Meituan, there are now market reports that the Shenzhen-based tech giant plans to reduce its stock investments in listed companies by 100 billion yuan ($14.49 billion) this year.
According to a report by the Financial Times on September 1, Tencent‘s executives have put forward a soft internal target of divesting about 100 billion yuan ($14.49 billion) from its listed stock assets this year, depending on market conditions and internal profit targets.
Tencent later replied that it has not set any target amount for the reduction, adding that its investment has always been aimed at creating rich returns for the company and shareholders, rather than reaching a certain amount at any given time. Moreover, Tencent affirmed that it has not been subjected to any external pressure on its portfolio.
In a conference call for the tech giant’s second-quarter financial report on August 17, executives said that reports of its reducing Meituan‘s shares were inaccurate. They also said that Tencent has been optimizing its investment portfolio, and that the firm pays shareholders about $17 billion to $18 billion, in essence, hoping to provide sufficient returns for shareholders. Before Tencent reduced its holdings in JD.com and other stocks, it also returned these funds to shareholders, and at the same time, it also carried out some repurchases to rationally distribute the investment. In the future, Tencent will maintain its rebates and repurchases to shareholders.
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It is worth noting that the financial report shows that as of June 30, the fair value of Tencent‘s equity in listed investment companies was 601.9 billion yuan ($87.20 billion). At the end of last year, the figure was 982.84 billion yuan ($142.39 billion). This also indicates that the fair value of Tencent‘s investment has decreased by about 380 billion yuan ($55.05 billion) within six months.
Since the second half of last year, Tencent has reduced its holdings in JD.com by 14.7% in the form of dividends, and it has also successively reduced its holdings in Heilan Home, Sea Limited, BBK Electronics, Koolearn Tech, H. Brothers and other companies.