Tencent invests US$66 million in leap from smartphone screen to the big screen
Operator of China’s largest social network will become the second-biggest shareholder of a TCL-backed smart TV maker.
Tencent Digital, a unit of the Hong Kong-listed Tencent, has agreed to invest 450 million yuan (US$ 66.3 million) in Shenzhen Thunderbird Network Technology, a smart television company backed by TCL Multimedia Technology Holdings.
The capital injection will make Tencent Digital the second-largest shareholder of Thunderbird Network Technology with a 16.67 per cent stake in the smart TV maker, according to a stock exchange filing by TCL Multimedia on Monday.
TCL Multimedia, which indirectly owns Thunderbird Network Technology, will see its stake in the company reduced from 54.05 per cent to 45.55 per cent after the deal.
The capital injection is part of the strategic cooperation deal inked between Tencent Digital and TCL Multimedia. Apart from the funding support for the development of the smart TV business, the two companies are expected to set up a joint operation team to “increase business operation value through big television screens for family entertainment, and deepen the cooperation in product upgrade and innovation, market resource synergies and membership coherence”, said the statement.
“The big TV screens in living rooms hold the key to reach more than 500 million Chinese families,” he said.
By investing in Thunderbird Technology, Tencent is expected to be able to pre-install its gaming and video streaming apps into the company’s internet-connected smart TVs, providing it an edge over competitors, Zhang added.
TCL accounted for about one-fifth of China’s domestic television shipments in 2016 and its smart TV platform has more than 20 million active users.
In June, Tencent invested 300 million yuan for a 7.71 per cent shares in Coocaa, a smart TV unit of Chinese TV maker Skyworth Digital Holdings, in a deal that values the company at 4 billion yuan.