Victor and Bloomberg and Reuters
Tencent (0700) is said to be selling some of its share investments in 1,200 companies, of which around 100 are listed companies worth over US$280 billion (HK$2.18 trillion), the Information digital media and technology business news website reported.
This came as the Pony Ma Huateng-controlled internet titan's investment in 100 listed companies posted unrealized gains of around US$120 billion, the report said, citing people familiar with Tencent's strategy.
That is six times more than the firm's own expected net income for the year. The company is expected to reveal its annual result on March 24.
Including US-listed Tencent Music and Hong Kong-listed China Literature (0772), the Shenzhen-based company's holdings in other companies that are publicly traded are valued at around US$184 billion - nearly triple that of US$64 billion in the same period in 2019.
Over the years, Tencent has spent over US$80 billion on the stakes, according to the report.
The group's investment strategy is based on long-term value that can be created instead of short-term targets and financial returns, it said.
Tencent aims to generate strategic benefits with its core business by investing and building an industry ecosystem with the firms it invests in.
Analysts expect its net profit will jump to around US$20 billion, taking the scale of the paper gains into consideration, Information said.
Tencent's share rose 2.25 percent to HK$658.50 while its market capitalization hit HK$6.32 trillion as the news came out yesterday.
The creator of the messaging platform WeChat has been quickly evolving beyond its status as a social media and gaming behemoth over the past decade, pouring billions of dollars snapping up stakes in promising startups and widening its reach in areas from social media to grocery delivery, Bloomberg reported.
Tencent has invested in many of the country's dominant internet services from early on, like e-commerce giant JD.com (9618), ride-hailing platform Didi Chuxing, as well as on-demand delivery app Meituan (3690).
It also owns a 16.5 percent stake in US-listed e-commerce upstart Pinduoduo, whose stock surged 295 percent last year.
It bought a majority stake in Riot - the creator of League of Legends, the world's most popular desktop-based game - in 2011 and fully owned it by 2015, Reuters reported.
The firm announced last year that it will invest 500 billion yuan (HK$596.07 billion) over the next five years in technology infrastructure, including cloud computing, artificial intelligence and cybersecurity.
