Tencent's plans for 2022 could include more divestments while also chasing after fewer acquisitions. After selling JD.com and Sea, a Singapore-based company, Tencent may also opt to unload its interest in Pinduoduo, Meituan, and Kuaishou.
Tencent Holdings' Plans to Abide by Beijing's Tightened Regulatory Situation
According to the story by SCMP, Tencent Holdings, the Chinese internet giant, could be opting for more divestments and even pursue fewer acquisitions, per analysts. These moves are in the wake of Beijing tightening regulation over China's Big Tech companies.
Pony Ma Huateng, the founder, chairman, and chief executive of Tencent, signaled a very low-key future for the massive company, as also reported by Yahoo Finance. As of press time, Tencent is considered the world's largest video gaming business by revenue as well as China's largest social media platform thanks to WeChat.
Company Executive Gives Statement on Tencent's Moves
The Tencent executive announced in his speech during a year-end meeting the firm's move to offload its stakes in e-commerce providers JD.com and Sea.
During the meeting, Ma noted that Tencent should do its job without actually crossing any lines and reiterated the firm's own commitment to serve as an "assistant and connector" for both the country and society as reported by LatePost, an online Chinese media outlet cited by the SCMP report.
Tencent Plans to Divest Shares in Investee Companies
According to Chinese equities analyst Ming Lu, who is from Aequitas Research, the moves have showed Tencent's resolve to follow the laws while keeping a low profile and surviving the current restrictions. China's tech sector has been weathering the government's regulatory storm ever since late 2020.
He then indicated that Tencent will continue to divest its shares in certain investee companies and also slow down its corporate acquisitions, particularly those on the mainland. Previously, Tencent, regarded as a tech giant that has been touching the life of nearly all of China's internet users, has been actively making investments in a number of different companies.
China's Market Watchdog Fined Tencent in 2021
The holdings reportedly amount to a massive $130 billion with $80 billion of them being held in publicly listed companies, according to the data from Bloomberg as noted in the SCMP report. The Shenzhen-based Tencent, however, is still under pressure to address certain issues related to video games and data security as Beijing is looking to curb the influence of Big Tech firms.
China's market watchdog even fined Tencent a number of times in 2021 for the company's failure to disclose past mergers and acquisition deals. In August, however, Tencent's own music streaming business terminated all of its exclusive licensing deals with global record labels in order to abide by the order from SAMR or the State Administration for Market Regulation.
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Written by Urian B.
