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Tencent says no ‘external pressure’ to divest as it is dogged by reports on paring back sprawling portfolio

  • Tencent said it does not set divestment targets and previous offloading of JD.com and Sea shares were the result of over-performing stocks
  • The company has faced multiple media reports and speculation that it might reduce holdings in Big Tech firms like Meituan to avoid antitrust scrutiny

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A man walks past Tencent headquarters in China’s southern technology hub of Shenzhen on July 10, 2022. Photo: AFP
Iris Deng
Tencent Holdings, China’s social media and video gaming behemoth, has denied that it is under any external pressure to downsize its vast investment portfolio amid multiple reports saying it plans to do just that.

“We don’t have any target amounts for divestments,” Tencent said in a statement on Thursday. “We have always invested with the goal of generating strong returns for our company and shareholders, not according to any arbitrary timeline or target. Nor have we received any external pressure regarding our investment portfolio.”

The Shenzhen-based company, China’s most highly valued technology firm that is known as “owning half of the mountains and rivers” in the domestic industry, issued the statement in response to a report from the Financial Times. The newspaper reported that the company planned to divest about 100 billion yuan (US$14.5 billion) of its US$88 billion listed equity portfolio in 2022, citing anonymous sources.

This was just the latest report to raise questions about Tencent’s sprawling investment portfolio that spans video gaming, social media, finance, e-commerce and entertainment. The company’s vast holdings have also invited scrutiny from Beijing.
Last month, Reuters reported that Tencent planned to sell all or part of its 17 per cent stake in Meituan, which Tencent’s chief strategy officer James Mitchell called “not accurate”, without elaborating further. The Financial Times also said Meituan was a divestment target, as it could help reduce regulatory pressure.
The reports have come months after Tencent offloaded shares in JD.com last December and Singapore-based e-commerce firm Sea Limited in January.
Tencent offloaded US$16 billion worth of shares in JD.com, China’s second largest e-commerce platform, by distributing the shares as a special dividend to investors. It also raised US$3 billion by selling 14.5 million American depositary shares in Sea.

“Our most recent divestments, JD.com and Sea, were over-performing and generated many multiples on our initial investment,” Tencent said in its statement, adding that it will continue to make investment decisions “independently and in the best interest of our shareholders over the long term”.

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