Parallel Nebula Investment Limited (PNI) has distributed approximately 51 million Class B shares of Kuaishou at the request of certain external capital partners. PNI is an investment vehicle indirectly controlled by Tencent Plus Partners (TPP), which is under Tencent. TPP facilitates collaboration with external capital partners by investing with Tencent.
Tencent (excluding TPP) now owns around 640 million Class B shares of Kuaishou, which represents approximately 17.96% of the total number of Kuaishou’s Class B shares following the distribution. The primary distribution involved PNI’s Kuaishou shares, resulting in a decrease of about 1.4% in PNI’s shareholding after the distribution.
Tencent stated that this distribution is made by the investment vehicle PNI at the request of certain external capital partners, adding that it remains confident in the long-term outlook of Kuaishou and will continue its strong partnerships with Kuaishou.
On December 23, 2021, Tencent announced that it would distribute around 460 million shares of JD.com to its shareholders as a mid-term dividend. This distribution resulted in Tencent‘s shareholding in JD.com decreasing from 17% to 2.3%.
During the period of anti-monopoly policies, there were speculations that Meituan and Kuaishou would be targeted by Tencent. On November 16th, 2022, Meituan released a statement announcing changes in Tencent‘s shareholding structure. As a result, Tencent President Martin Lau resigned as a non-executive director with immediate effect. Furthermore, multiple entities indirectly held approximately 17% of Meituan shares on behalf of Tencent and decided to distribute about 958 million Class B ordinary shares to its shareholders.
During the 2022 financial report conference call, James Mitchell, Chief Strategy Officer of Tencent, discussed the company’s capital allocation strategy. He stated that Tencent is proactive in providing capital feedback. Furthermore, he announced a 50% increase in regular annual dividends for this year.
Mitchell expressed optimism about the Chinese market due to the observed consumption trends of Chinese consumers. While Tencent can not predict how the company will be valued by the market, it has noticed an increase in consumer activity and is therefore taking a proactive approach by investing in small non-listed enterprises within China that operate in interesting areas. However, Mitchell noted that the international environment is highly dynamic and as such, Tencent will exercise selectivity when considering investments outside of China.