Tencent Holdings Ltd. is looking into shedding more of its huge investment portfolio as the Chinese social-media and videogame company tries to fund a series of share buybacks and refocus its growth strategy, people familiar with the matter said.
The technology giant
TCEHY,
700,
which owns stakes in some of China’s largest internet companies, has recently completed a regular review of its sprawling portfolio and identified its priorities for possible stake sales based on the returns these investments have generated, the people said. Potential disposals could include online real-estate brokerage KE Holdings Inc.
BEKE,
food-delivery company Meituan
MPNGY,
3690,
and ride-hailing giant Didi Global Inc.
DIDIY,
they added. Tencent is in no rush to execute the divestments, the people said, and it is unclear when they will happen.
The review into potential disposals is being driven partly by the desire to free up cash from some matured assets to allow Tencent to invest in other areas such as videogames and healthcare. Another motivation is to support buybacks to ward off the pressure on Tencent’s share price as Prosus NV
PROSY,
PRX,
its biggest shareholder, reduces its stakes in the Chinese company, according to people familiar with the matter.
If they do happen, the disposals will be part of a dramatic turn for Tencent, which owns WeChat, the ubiquitous do-everything app, as well as many other services on which vast swaths of the Chinese public have become reliant. The company became a major investor in startups, assembling an investment powerhouse that was worth hundreds of billions of dollars before China’s crackdown on internet platforms deflated valuations.
An expanded version of this report appears at WSJ.com.
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