FirstFT: Tech titan Tencent pivots from investment buyer to seller

Good morning. Chinese internet giant Tencent is pivoting from years of aggressive stakebuilding to focusing on divestments as it comes under pressure from investors and Beijing’s recent crackdown on Big Tech.

As part of an important shift in strategy, the company has outlined a soft target of divesting about Rmb100bn ($14.5bn) of its $88bn listed equity portfolio this year, according to two people familiar with the matter.

Partial divestments in large Chinese companies such as food delivery service Meituan were in the pipeline, the people said. Tencent owns more than 10 per cent of six large listed Chinese tech companies and is the biggest investor in Meituan, short-video sharing app Kuaishou and popular question-and-answer site Zhihu. Cutting its stakes could help reduce pressure on Tencent from China’s anti-monopoly regulator, the people said.

Beijing’s tech crackdown has led to nearly 100 deals involving Alibaba and Tencent coming under antitrust scrutiny, reversing authorities’ once laissez-faire approach towards the country’s vast internet sector.

Investors have also pressured the company to divest underperforming assets as China’s zero-Covid policies and property crisis batter the economy. Tencent reported its first decline in quarterly revenues in August, marking a departure from its days of double-digit growth.

Thank you for reading FirstFT Europe/Africa — Gary

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The day ahead

Economic data S&P Global releases August manufacturing purchasing managers’ indices for the EU, Germany, Italy, France, Spain, the UK and the US. July unemployment data is out for the eurozone and Italy, which also has second-quarter GDP. Germany publishes July retail sales. The US has July construction spending and weekly jobless claims, while in the UK, Nationwide releases its August housing survey.

European Medicines Agency meeting The regulator reviews Moderna and BioNTech/Pfizer’s boosters that were adapted to target the Omicron variant. The US approved Omicron-specific vaccines yesterday.

Corporate earnings Athletic apparel retailer Lululemon, US semiconductor manufacturer Broadcom, food processor Hormel Foods and beverage giant Pernod Ricard report results.

Schools return Most British schools return after the summer holiday. In China, Shanghai reopens all schools after months of Covid-19 closures.

Biden to condemn ‘extreme’ Republicans In a primetime address from Philadelphia tonight, US president Joe Biden will portray the Republican party as extremist, hypocritical and captive to Donald Trump’s influence ahead of November’s midterm elections.

European Premiere League transfer window closes Chelsea has a net spend of more than £200mn on six confirmed signings as the transfer window officially closes today. Premium subscribers can click here to sign up for Scoreboard, our newsletter on the business of sport.

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‘Don’t Pay’ energy bill protest gathers steam As fears mount about Britain’s energy crisis — with a public health expert warning of a “humanitarian crisis” of children suffering respiratory problems from living in cold, damp housing — grassroots movement Don’t Pay is hoping to amass 1mn people to cancel their direct debit energy payments on October 1.

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Film

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