The announcement marked a turning point in the Chinese tech landscape: on November 16, Tencent, China’s most valuable company, at 375 billion euros (compared to 285 billion euros for Meta, for example), announced that it would sell most of its shares in Meituan, a very popular service platform in China. The approximately 23 billion dollars (21.5 billion euros) of shares held will be distributed to its shareholders. Best known for WeChat, China’s most widely used app and 1.3 billion strong worldwide users, Tencent has become a superinvestor over time, supporting hundreds of Chinese and foreign start-ups, and investing in hundreds of video game studios. But, after twenty years of all-out development, the time has come for caution.
The sale of Meituan comes in a difficult context for the group which published a turnover down 2% in the third quarter, to 140 billion yuan (19 billion euros). This is the second quarter of decline in a row, a first for the Chinese giant, which has seen its stock market value melt by 60% since its peak in early 2021. In 2022, its turnover should only increase by 0, 5% to around 563 billion yuan. Is its weakest growth since its IPO in 2004, estimates the research firm Refinitiv.
Tencent is suffering both from the economic situation in China, marked until recently by a strict zero Covid policy, and from a campaign to regulate tech platforms. Less affected than its rival Alibaba, sentenced to several fines, including one, at the beginning of 2021, of 18 billion yuan for abuse of a dominant position, Tencent is not immune to attacks by regulators against the monopolistic practices of platforms. Faced with the wrath of the authorities, the media giant and world number one in video games is forced to part with part of its holdings.
Ma Huateng, a discreet boss
Already a year ago, Tencent had distributed to its shareholders shares of JD. com, the number two Chinese online retailer, for an amount of 16.4 billion dollars, thus reducing its share in the group from 17% to 2%. The company also had to abandon a merger project between the two main video game streaming sites, and end its agreements granting exclusive music distribution rights in China to its QQ Music platform, which dominates that sector.
If, in this tense political context, Tencent came out better than its competitors, it is due to the company’s boss, Ma Huateng (or Pony Ma in English), whose discretion contrasts with the ardor of Jack Ma, the charismatic founder of Alibaba. In October 2020, the latter had dared to denounce the “pawnshop mentality” of the Chinese banking regulator, an insolence punished by the cancellation of the IPO of the financial subsidiary of Alibaba.
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