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​Earnings from investments account for one-third of Tencent’s revenue

CFBOND
2018-12-11 15:32

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There were about 40 Internet companies who filed for IPOs in Hong Kong and the United States as of the end of the year, while 14 of them were backed up by China's Internet giant Tencent Holdings Limited, said the China Securities Time on Saturday.

Tencent Music Entertainment Group will float its shares at the New York Stock Exchange (NYSE) on Dec. 12 and a video games startup, iDreamSky Technology Holdings Limited, in which Tencent holds 20 percent of its shares, was listed at the Hong Kong Stock Exchange on Dec. 6 this year.  

Meanwhile, an e-commerce platform, Mogujie.com, where Tencent remains as its biggest shareholder, issued 4,750,000 American Deposatory Shares (ADS) and collected 76.475 million U.S. dollars.

In addition, other Tencent-backed IPOs this year include mobile phone maker Xiaomi Corporation, life-service platform Meituan Dianping, live-streaming platforms Inke and Huya, hotel and flight ticket booking website eLong.com, financial services company China Renaissance Group, Haidilao Hot Pot, video streaming platforms iQiyi and Bilibili, used car e-commerce platform Uxin Ltd,, online group discounter Pinduoduo, electric car startup Nio and information service platform Qutoutiao Inc. 

The earnings from these investments have accounted for one-third of Tencent's total profits as of the third quarter of this year while the figures were 7 percent and 22 percent in 2016 and 2017 respectively.

Tencent's social media platform Wechat saw a slowing-down of its growth in numbers of users recently, and any new faddish video games are unlikely to pop up soon, therefore investments in other Internet fields seem to be the quickest way to earn cash, said analysts.

However, the yields from IPOs are not the whole story for Tencent's investment motivations. The company intends to expand its business and channels into more platforms to provide payment spots for its Wechat Payment system, analysts said. 
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