E-currency boost for Tencent

Business | 16 Jul 2020

Agencies and Winnie Lee

China's central bank plans to test its digital currency on the platforms of Meituan Dianping (3690), which is backed by Tencent (0700), while the latter suggested Beijing expand the health code used to identify people who are free of Covid-19 infections for use as a social code.

Tencent shares rose 3.43 percent to HK$543 yesterday.

Citi and HSBC gave it a target price of HK$649 and HK$635, respectively.

The tech giant declared the launch of government administration upgrades and unveiled the Tencent Govt Cloud 2.0 to provide aid for government governance at a 2020 strategic event yesterday.

It hopes the health code - currently used for indicating citizens' health status and allowing entry to public spaces - can be merged into wider-use code for the future.

Meanwhile, Meituan has been in talks with the research wing of the People's Bank of China on real-world uses for the virtual legal tender dubbed digital currency electronic payment, sources said.

The specifics of the partnership have yet to be finalized, they added.

Meituan joins ride-hailing startup Didi Chuxing in exploring applications for a digital yuan, which lives on a mobile wallet application and offers Beijing greater control of the country's financial system.

Like Didi, Meituan hosts billions of dollars in daily transactions in realms from the meal delivery to online travel services, and its participation would drive mass acceptance and widen Beijing's global lead in government-backed virtual currencies.

Shares of Meituan closed 1.78 percent higher yesterday.

The central bank research wing is also in discussions on trials with video platform Bilibili, another Tencent-backed company, one of the people said.

Separately, Alibaba (9988) said its e-commerce platform TMall is targeting helping 5,000 companies to become "unicorns" in two years by providing aid in financing, marketing and traffic growth.

Tmall has produced thousands of new brands in the past three years, according to its own data. In the past year, a new brand with sales of over 100 million was born every nine days.

Shares of Alibaba were up 1.25 percent yesterday.

Elsewhere, Tik Tok's parent company, ByteDance, plans to spin off TikTok to let it become an independent American enterprise.

Charles Gasparino, a reporter from Fox News said on Twitter yesterday that ByteDance has been seeking strategic alternatives amid a Whitehouse review of the app and possible ban.

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