The turbulent Penguin empire has been plagued with turmoil. Behind the latest bright financial reports of Tencent, the company’s core gaming business has declined. On the second day after the financial report was released, Naspers, Tencent’s largest shareholder, held for 17 years, announced a reduction plan of 190 million shares. Today, the Hong Kong Stock Exchange disclosed that Liu Chiping, president of Tencent Holdings, reduced the number of Tencent shares by HK$434.3624 per share on March 27 and cashed in over HK$400 million.
Every reporter | Guo Xin
Every edited | Zhang Yangyun
What is the feeling of holding a Tencent stock? I think this question should be asked about the investors who once bought Kweichow Moutai.
However, behind Tencent's soaring share price, a hidden concern is secretly fermenting. Recently, there have been bad rumors. On March 21st, Tencent announced its financial report showing that the company’s core gaming business has experienced a month-on-month decline.
On the second day after the financial report was announced, Naspers, a major shareholder of Tencent, which had held shares for 17 years, announced that it intends to reduce its holdings by 190 million shares and cash out 10 billion US dollars.
Today, according to the Hong Kong Stock Exchange, Liu Chiping, president of Tencent Holdings, reduced the number of Tencent shares at an average price of HK$434.3624 per share on March 27, with a cash outflow of more than HK$400 million.
Historically, the major shareholders of important listed companies have experienced large-scale reductions, which often require attention. Tencent is a very important heavyweight stock for Hong Kong stocks. Shareholders and senior executives need to be alert.
Who is Liu Chiping?
According to Tencent's official website, Liu Chiping’s position is second only to the company’s main founder, chairman and chief executive officer Ma Huateng, and is the president of Tencent Holdings Co., Ltd., responsible for managing the daily operations of the company. It can be said that Tencent’s business empire The "Trader" ”.
Prior to joining Tencent, Liu Chiping was the executive director of Goldman Sachs Asia Investment Banking and the chief operating officer of the telecommunications, media and technology industries.
Speaking of the relationship between Liu Zhiping and Tencent, we must start with the 2004 Goldman Sachs operation of Tencent's listing project.
At that time, Tencent had been established for 6 years. At that time, the Internet bubble had just begun to burst. Early investors were skeptical of Internet companies. However, Liu Chih-ping's talent demonstrated in his work made Ma Huateng extremely appreciate. Liu Chi-ping also felt the excellence of this Chinese company in the Tencent IPO. So the story of Maxima and Bole began.
In the later development of Tencent, Tencent can be said to be a smooth, rapid development and expansion of business into all aspects of Chinese daily life. The market value of the company ranks among the top five in the world. As the person in charge of the daily operations of the company, Liu Chiping, the president of Goldman Sachs, has contributed.
According to the Xinhua News Agency, Tencent’s investment has accelerated in the past six years. According to statistics, Tencent currently invests in more than 600 companies. There are some domestic Internet giants such as JD.com, U.S. Group, Didi, 58 and others; there are also some emerging Internet companies with small volume but fast-growing momentum, such as Mobike Bicycles, Quick Hand, Handan, and Pindo. Wait.
Tencent President Liu Chiping said at the Tencent Investment Annual Conference last year: "The newly added value of these companies has exceeded Tencent's own market value. Last year, Tencent’s investment companies including Yeewen Group, Sogou, Zhongan Insurance, and Yixin all listed on the market, and Tencent also received return on investment.
In December 2017, the "Bloomberg Business Weekly" selected the 2017 top 50 most influential people in the world. It was a low-key "Liu Zhiping" and became the sole representative of the Chinese business community, and Sun Zhengyi and Bezo. Sri Lanka, Musk, and other prominent international predators are on the same list.
However, the Penguin empire's second home "Liu Zhiping" is rarely understood by the public, but his influence on the empire is like throwing stones in the water. The ripples are spreading.
The market value evaporates HK$477 billion after the publication of the financial report
According to the Hong Kong Stock Exchange, Liu Chiping, president of Tencent Holdings, reduced the number of Tencent shares by HK$434.3624 per share on March 27th and cashed in more than HK$400 million. This is not the first time Liu Chiping has reduced his holding. On September 29 last year, the stock exchange data showed that Liu Chiping sold 600,000 Tencent shares at a price of 346 Hong Kong dollars per share, which represented 0.49% of the issued voting shares. A total of HK$207 million (approximately RMB 178 million) was cashed out.
In addition to Liu Chiping, the largest shareholder of Tencent, which has held shares for 17 years, also started to reduce its holdings. On March 22nd, Naspers, Tencent’s largest shareholder, announced to investors that it will sell up to 190 million Tencent shares, equivalent to 2% of Tencent’s entire issued share capital, which will reduce its shareholding in Tencent from 33.2% to 31.2%. As soon as the news came out, Tencent Hong Kong stocks gapped sharply lower on the following day, eventually closing down 4.42%, with volume reaching HK$126.1 billion, setting a new record for Tencent Hong Kong stocks.
After the majority shareholder announced his reduction, Ma Huateng responded quickly. On March 25, at the 2018 IT Leadership Summit held in Shenzhen, Chairman of the Board of Directors of Tencent Ma Huateng responded to the reduction of the major shareholder when he spoke. He said that the major shareholder has been holding for more than a decade and only sold a little bit a few days ago. It has also been said that it will not be sold within three years. Ma Huateng also stated that Naspers has been a firm strategic partner for the company for many years. Tencent respects and understands Naspers's decision and expects to continue close cooperation in the future to build a mutually beneficial and win-win future.
Naspers Chief Financial Officer Basil Sgourdos told Reuters that it is difficult to sell dream assets such as Tencent, especially assets that allow you to have long-term beliefs. The decision to reduce holdings is not driven by Tencent's views and the future opportunities we see. The driving factor is actually that the company needs funds to develop e-commerce business.
As an important weighted stock of Hong Kong stocks, Tencent’s rapid response to the reduction of major shareholders can stabilize investor sentiment and eliminate market doubts. But this time, in the face of Tencent's second home holdings, what will Ma Huateng respond to? How will Liu Chi-ping respond to himself?
It is worth noting that on March 21st, Tencent released the latest financial report. Behind the data, the core gaming business of Tencent dropped in the fourth quarter of last year. According to statistics, Tencent’s game revenue in the fourth quarter was 24.367 billion yuan (the same below), which was a year-on-year increase of 32%, which was lower than the 32.8 billion yuan in the third quarter, which was a 9.5% decrease from the previous quarter.
Tencent quarterly online game revenue and growth rate
Tencent explained in its earnings report that the reason for the decline is the high base of PC games in the third quarter of 2017 due to the high base of virtual item sales promotion activities, the decrease in contribution from role-playing games and shooting mobile games, and the new role-playing games mobile phones and other. The impact of the new mobile game release schedule.
Since the publication of the financial report, the market value of Tencent has evaporated more than HK$470 billion in five trading days, and has continued to fluctuate, and the volatility has increased. Today, Tencent fell 4.63%, and the market value once again fell below HK$4 trillion.
Tomorrow, in the face of the news of the reduction of the No. 2 figure, what kind of performance will Tencent's stock have?