Tencent Holdings Ltd (0700)

[CityFarmer]

The M&A spree of "New China" continue...

Tencent to buy stake in digital mapping firm for S$234 million

SHANGHAI — Chinese Internet service provider Tencent Holdings will buy a stake in digital mapping company NavInfo for 1.17 billion yuan (S$234 million), after its rival, Alibaba Group Holding, earlier this year announced a deal to acquire an online map provider.

Tencent, owner of the WeChat instant messaging application, will buy 78 million NavInfo shares, an 11.3 per cent stake, from that company’s state-owned parent China Siwei Surveying and Mapping Technology, said a Shenzhen Stock Exchange filing yesterday. The deal is pending regulatory approval.

Although the filing did not elaborate on how the two would cooperate, the tie-up could help Tencent track user locations, allowing it to pipe in advertisements for services nearby, the Wall Street Journal reported.

It could also help the company guide users to stores and restaurants where they could pay with Tencent’s mobile payment service on WeChat.

Mapping is becoming a vital battleground for the largest technology providers in the world, with companies such as Google and Apple stepping up investments. Last year, Google acquired Waze, which helps users navigate traffic with smartphones, for almost US$1 billion (S$1.25 billion). Apple, a newer player to the market, has made several acquisitions to improve its services, including deals for Locationary, HopStop and Embark.

Last month, China’s largest e-commerce company, Alibaba, announced a similar move to acquire Autonavi Holdings in a deal that values the nation’s most popular mobile mapping provider at US$1.5 billion.

Alibaba, which is preparing for a United States initial public offering, is seeking to draw more of China’s 618 million Internet users with services for smartphones and tablet computers. Baidu, owner of China’s largest Internet search engine, has its own mapping service.

As of December, 81 per cent of all Internet users in China went online with mobile devices, said the official China Internet Network and Information Center. Agencies
http://www.todayonline.com/tech/tencent-...34-million

[greengiraffe]

PUBLISHED MAY 10, 2014
WEALTH INSIGHTS
Foreign players Net big wins in China
S African investor Naspers's US$34 million stake in then struggling Chinese Internet startup Tencent in 2001 is worth US$40 billion today

WELL-TIMED INVESTMENT
Tencent, which created a free instant messaging service, was beset with money woes until Naspers stepped in. - PHOTO: REUTERS
Shenzhen, China
IT is one of the best investments of the digital age.
In June 2001, a South African media company called Naspers paid US$34 million to acquire a big stake in a struggling Chinese startup. Today that startup - Tencent - is an Internet colossus worth nearly US$120 billion, far more than Web pioneers such as eBay or Yahoo. And Naspers is US$40 billion richer because of its well-timed bet.
Foreign investors like Naspers have emerged as some of the biggest winners in this country's sizzling Internet market.
Yahoo and Japan's SoftBank could score a total of US$75 billion on their shares in Alibaba, the Chinese e-commerce giant that filed its plans on Tuesday for an initial public offering. The venture capital firm Draper Fisher Jurvetson owned nearly a third of Baidu, the Chinese Internet search engine, when it went public in 2005; its shares rose 354 per cent on its first day of trading. The IPO this year of an Alibaba rival, JD.com, the company formerly known as 360Buy, will rain profit on a host of foreign investors, like the US investment firm Tiger Global, DST of Russia and Prince Alwaleed bin Talal of Saudi Arabia.
"It's really the law of big numbers," said Stuart Schonberger, a partner at CDH Investments, a private equity firm focused on China. "With China, when it goes right, it's just amazing." Foreign investments in this country's Internet sector have been so large and lucrative that some analysts worry that China could further tighten its existing restrictions as a way to ensure its control over one of the most dynamic and sensitive parts of the economy, as it has with banking, telecommunications and aviation.
But so far, the Chinese government has shown no overt concern. Regulators have not pressured foreign shareholders to reduce their stakes or tried to prevent Chinese companies from listing overseas. Perhaps, that's because Beijing's influence in this sector is more subtle, analysts said. The biggest Internet companies are managed by Chinese entrepreneurs who have allowed the government to closely monitor their websites and censor at will - and foreign investors have largely taken a passive role. "If the government needs to regulate Internet companies, it won't matter if they're owned by foreign companies," said Hong Bo, a Beijing-based analyst who follows China's information technology industry.
China's top leaders have praised Alibaba and Tencent as examples of innovative Chinese companies. China's official news agency even published a commentary a few weeks ago hailing the rapid development of the Internet sector, without mentioning that virtually all of the major companies got significant funding from foreign investors. "Twenty years after the world's most populous country gained access to the Internet, China has been fundamentally and irreversibly changed, but not in the way some Western prophets had expected," the Xinhua commentary said. "Instead of bringing collapse, the Internet in China is becoming more commercially robust and innovative."
This system of foreign ownership is rooted in the late 1990s, when Chinese entrepreneurs were desperately seeking capital to finance their Internet startups, many of which were modelled on companies in Silicon Valley. Because there were few Chinese venture capital firms, many Chinese startups turned to foreign capital. There was just one problem: The state restricts foreign investment in areas deemed sensitive. So clever bankers and lawyers quickly found a solution. They proposed registering a holding company offshore that would control the assets of a startup. The holding company would then be linked to onshore entities owned by Chinese residents, who would hold the Internet business licence.
Regulatory loophole
This complex investment structure - known as the variable interest entity, or VIE - proved to be a regulatory loophole that allowed Chinese Web entrepreneurs to tap foreign funding. It also set the stage for the companies to list overseas.
"There were no viable exits for Internet companies in China," said Gary Rieschel, co-founder of the venture capital firm Qiming Ventures, which operates in China. "To list in Shanghai, they had to show three years of profits. And none of the companies could do that." Foreign venture capital firms rushed to take advantage. In addition to Draper Fisher Jurvetson, Silicon Valley outfits such as Integrity Partners, GGV Capital and Sequoia Capital all bought early stakes in some of China's hottest startups, including Sina, Sohu, Baidu and NetEase. A handful of strategic investors, companies with longer investment horizons, also bought big stakes. In 1999, SoftBank made the first of several investments in a fledgling Chinese business-to-business website called Alibaba.com with US$20 million. SoftBank's chairman, Masayoshi Son, told colleagues at the time that he intended to get a foothold in China's Internet market with the aim of holding for years.
"Masa's a very unique guy, an operations guy with a strategic vision," Chauncey Shey, executive managing partner at SB China Venture Capital, a SoftBank affiliate, said of Masayoshi Son. "He usually doesn't need to exit. He thinks long term." Yahoo, founded by Stanford classmates Jerry Yang and David Filo, has also struck gold with Alibaba. In 2005, local competitors were outmanoeuvring Yahoo's China website.
So Yahoo's top executives that year announced that it would cede control of its Chinese-language website to Alibaba. As part of that deal, Yahoo agreed to invest US$1 billion in what had become the Alibaba Group in exchange for a 40 per cent stake in the company. That investment now looks like a brilliant stroke. Soon after the two sides signed the deal, Yahoo began to falter in the US market, while its Alibaba investment took flight with the explosive growth of the Chinese company's e-commerce platforms, Taobao and Tmall. Yahoo's stake in Alibaba is now worth about US$35 billion, even after it sold a chunk of its shares two years ago for US$7 billion.
Analysts say one reason so many foreign investors have succeeded in China's Internet market - and have avoided scrutiny from the Beijing authorities - is that they have taken a largely passive role in the startups. They tend to assume board seats but allow the Chinese founders of the companies to manage day-to-day operations and develop their own business strategies. That has been the model for Naspers's relationship with Tencent.
Founded in Johannesburg in 1915 as a publisher of newspapers, Naspers later expanded into pay TV and Internet services and began searching for deals in China. The company, which maintains a low profile, entered the country in the late 1990s. In 2001, in its first major deal, Naspers bought a stake in Tencent, which had been started by a group of engineers enamoured with beepers and instant messaging.
Reaping the rewards
At the time, Tencent's prospects were grim. The company, which was based in the southern Chinese city of Shenzhen, was struggling to make a profit with its free instant messaging service, OICQ. And AOL, which had acquired an instant messaging company called ICQ, had just filed suit in the United States against Tencent alleging trademark infringement.
Then, in the middle of negotiations with Naspers, the dot-com bubble burst in the United States, deflating the hopes of the young Chinese entrepreneurs.
Despite the challenges, Naspers valued Tencent, which soon changed the name of its instant messenger to QQ, at about US$80 million and agreed to pump more money into its operations.
Naspers acquired nearly half the company's shares from Tencent's two major foreign investors, Boston-based IDG and the venture capital arm of PCCW, which is controlled by the son of Hong Kong billionaire Li Ka-shing. The two firms, which had put just US$2.2 million into Tencent in 1999, sold their stake to MIH, a division of Naspers, at a huge profit.
"IDG and PCCW like to invest in startups. But when we needed money for further development, they were not able to help," Pony Ma, Tencent's chairman and co-founder, once said in an interview. "MIH had a lot of capital so it was a better guarantee." After its investment, Naspers stepped back and let the founders set the direction of the company.
Building off its instant messaging business, Tencent transformed into an online gaming and social networking powerhouse - one that is now listed on the Hong Kong Stock Exchange.
Venture capital firms have rarely held on long enough to make more than US$10 billion by investing in an Internet startup. But Naspers, which seldom grants interviews about its investments in China, held on for years, and its stake now reaches about US$40 billion. NYT

[CityFarmer]

Tencent marks the start of private bank in China...

China's Tencent wins approval to start banking business

SHANGHAI - China's Tencent Holdings Ltd <0700.HK> has been given approval to start its banking operations, the banking regulator said, making the internet firm the first of five recently approved private banks to open its doors to clients.

The launch of Tencent's private bank marks a gradual opening of China's closely guarded banking sector that is currently dominated by state giants.

As part of broader efforts to channel more loans to the country's cash-starved small businesses, the banking regulator has so far approved the development more than 10 private lenders in Tianjin, Shanghai, Zhejiang and Guangdong.

Shenzhen Qianhai Weizhong Bank, funded by Tencent, Shenzhen Baiyeyuan Investment Co. and Shenzhen Liye Group, had a registered capital of 3 billion yuan ($484.93 million), the China Banking and Regulatory Commission said in a statement late on Friday.

Also known as Webank, the lender would focus on loans to individuals as well as small and medium-sized enterprises, the regulator said.

Local business daily Caixin said Webank would officially start its banking operations on Dec. 28.

Prior to the launch of Webank, China Minsheng Bank was the country's sole private lender. REUTERS
http://www.todayonline.com/business/chin...g-business

[greengiraffe]

• Sep 19 2015 at 12:15 AM 
   
  
  
•  Updated Sep 19 2015 at 12:15 AM 
  

Chinese sharemarket: Is this the next Alibaba?

• Share via Email

NaN of
[img=620x0]http://www.afr.com/content/dam/images/g/i/2/f/6/w/image.related.afrArticleLead.620x350.gjm41n.png/1442471775542.jpg[/img]A user of the WeChat messaging app plays the game "Brave enough to touch the tiger's butt?" The game examines the web of corruption around fallen Chinese official Zhou Yongkang, after Chinese President Xi Jinping vowed to tackle both "tigers and flies". Bloomberg
by Greg Smith
Investing in Chinese technology stocks may not be for the faint of heart. But investors taking a medium to longer-term view might be interested in Tencent, lesser known than Alibaba and listed on the Hong Kong's Hang Seng Index.
Tencent dominates China's social networking space and online video games and is using some of its large cash hoard and robust free cash flows to invest in a range of companies, at home and abroad. It has also become one of the most active venture capitalists in China's technology sector.
Tencent is part of a triumvirate of internet companies collectively referred to as BAT (Baidu, Alibaba and Tencent). These companies grew up dominating the areas of search, e-commerce/online marketplaces and social media/gaming respectively. Today they have all moved beyond their historical spheres of expertise and are investing aggressively in a range of other market opportunities.
In Tencent's case these range from investments in other messaging and video gaming companies to adjacent markets. Many appear to be oriented to help build out the ecosystem for Tencent's digital payments and advertising businesses in the so-called online-to-offline (O2O) market.
[img=620x0]http://www.afr.com/content/dam/images/g/j/o/x/u/r/image.imgtype.afrArticleInline.620x0.png/1442466443183.png[/img]
Recently, one of China's biggest meal delivery start-ups, Ele.me.com (loosely translating to "Are you hungry?" or "Hungry now?"), announced that it had secured $US630 million ($884 million) in series F funding. Tencent and e-commerce companyJD.com (of which Tencent owns 20 per cent) are said to have participated.  
Tencent has already taken part in a $US350 million funding round in Ele.me in January, and cumulatively the food delivery company has raised more than $US1 billion, making it one of the most funded start-ups in China and globally. Ele.me has strong expansion plans, and already covers 260 Chinese cities, 300,000 restaurants and has 40 million users who spend an average of ¥60 million ($13 million) a day. Virtually all of its orders are sourced from the company's mobile apps.
Ele.me is part of the growing trend of online-to-offline businesses in China. These connect customers with real world services, generally via mobile devices.
By building out the O2O offerings on its messaging apps and platforms, Tencent can boost the income from its advertising and digital payment businesses. It is also a defensive move as it will keep users in its ecosystem rather than have them move to competitors such as Alibaba and Baidu.


Tencent is a handsome cash generator and is well placed to invest in expanding its business interests. Despite more than doubling its capital expenditure year on year in the recent quarter, free cash flows were still over ¥5 billion . Net cash on hand at June 30 was about ¥21 billion.
Although gaming remains the company's bread and butter, the advertising business is also on the up. Revenues last quarter roughly doubled year on year to almost ¥4 billion. Online advertising revenue was 17 per cent of the pie, up from about10 per cent last year.
Tencent shares do trade on more than 30 times 2014-15 earnings estimates, but this falls to 24 times in 2015-16.
The Chinese stock market has been volatile although it is worth pointing out that stocks on the Hang Seng (where Tencent is listed) have seen only around half the downside that mainland exchanges have from this year's highs. Mitigating risk factors include the fact the governance standards in Hong Kong have been generally higher, and multiples are lower than those on the Mainland. There is also a larger intuitional investor base in Hong Kong whereas retail investors have had heavier sway in Shanghai.

The company's dominant position in gaming in the rapidly growing Chinese market deserves a premium, in our view, and as highlighted above we think there is substantial untapped potential for the company in other areas.
Greg Smith is head of research at investment research and funds management house Fat Prophets. 
Disclosure: Interests associated with Fat Prophets declare a holding in Tencent.
For a free trial to Fat Prophets' daily market commentary please click here 



AFR Contributor

[cyclone]

Tencent Dominates Chinese Mobile App Use as Online Arena Grows

Tencent Holdings Ltd.’s messaging services were by far the most popular Chinese mobile apps in 2016, leading steady growth in the world’s largest internet and smartphone market, the government’s online industry overseers said Sunday.

WeChat remained the most heavily used app in the country in 2016, with almost 80 percent of the online population employing the social media service frequently, the China Internet Network Information Center or CNNIC said in its annual report. Tencent’s QQ took second place, while Alibaba Group Holding Ltd.’s online bazaar Taobao came in third. Baidu Inc.’s mobile app and Alipay, the payments service run by Alibaba-affiliate Ant Financial, rounded out the top five.

More details in https://www.bloomberg.com/news/articles/...rena-grows

[cyclone]

快手，有点儿意思 : https://www.kuaishou.com/

Tencent Said to Invest in Chinese Live Broadcasting App Kuaishou

by Jonathan Browning  and Crystal Tse
March 23, 2017, 12:52 PM GMT+8

Tencent Holdings Ltd. has agreed to invest in Chinese live broadcasting app Kuaishou ahead of a potential initial public offering of the Baidu Inc.-backed startup, according to people with knowledge of the matter.

Tencent and Kuaishou plan to announce the deal as soon as this week, one of the people said, asking not to be identified because the discussions are confidential. Tencent has been boosting spending on services including video-streaming to retain users for its WeChat and QQ messaging platforms.

Kuaishou, which runs a live-streaming social media platform similar to Twitter Inc.’s Periscope and Facebook Inc.’s Instagram, was founded in 2011, its website shows. Millions of original videos are generated daily using its technology, according to the website. The company competes with Sina Corp.-backed Miaopai, which allows users to film and share brief videos.

More details in https://www.bloomberg.com/news/articles/...p-kuaishou

[cyclone]

Tencent Emerges as Musk’s China Booster With 5% Tesla Stake

by Dana Hull , John Lippert , and Selina Wang
March 28, 2017, 7:39 PM GMT+8 Updated on March 29, 2017, 10:25 AM GMT+8

Tesla Inc. Chief Executive Officer Elon Musk just gained a massive and well-connected confidant to help him better crack China’s auto market: Tencent Holdings Ltd.

The Chinese internet giant isn’t just an investor, Musk said after his electric-car maker disclosed Tencent had bought a 5 percent stake in his company for $1.8 billion. He also referred to the owner of the WeChat and QQ messaging services as an adviser.

“Tencent’s passive stake is not only a vote of confidence in Elon Musk and the future of EVs, but also may help in accessing the Chinese market,” Brian Johnson, an auto analyst at Barclays Plc, wrote in a note to clients Tuesday.

Tesla stumbled out of the gate in China, with Musk blaming his sales staff for underwhelming results and stoking fears about charging challenges soon after deliveries began in 2014. While the company has been getting better traction -- revenue from China tripled last year to more than $1 billion -- sales from the market were still less than a quarter of what Tesla made in the U.S.

More details in https://www.bloomberg.com/news/articles/...-s-model-3

[cyclone]

Tencent, eBay and Microsoft invest US$1.4 billion in India’s Flipkart
Bangalore-based e-commerce site says the fund raising round values the company at US$11.6 billion

by Meng Jing
PUBLISHED : Tuesday, 11 April, 2017, 8:16am
UPDATED : Tuesday, 11 April, 2017, 8:16am

Tencent Holdings, operator of China’s largest online social and entertainment empire, has led a US$1.4 billion investment in an e-commerce firm in India together with Microsoft and eBay as they bet on the country becoming the world’s next major online shopping market, as domestic incomes there rise.

Flipkart Group, considered India’s leading e-commerce marketplace, confirmed on Monday it had raised the total from the three tech giants in a round that is deemed the “largest capital raised ever in the Indian internet sector”.

The latest cash injection pushes Flipkart’s post-transaction valuation to US$11.6 billion, said the Bangalore-based e-commerce company.

Launched in October 2007, Flipkart says it offers 80 million products across 80 categories and is becoming well-known for pioneering services in the country, such as cash on delivery.

Its existing investors include Tiger Global Management, Naspers Group, Accel Partners and DST Global.

More details in http://www.scmp.com/business/article/208...s-flipkart

[cyclone]

Indonesia’s Uber rival Go-Jek raises $1.2 billion led by Tencent at a $3 billion valuation

by Jon Russell
Posted May 4, 2017

Go-Jek, the motorbike on-demand startup that is battling Uber and Grab in Indonesia, has closed a new round of $1.2 billion led by Chinese internet giant Tencent, two sources close the company told TechCrunch. The deal, which we understand was signed last week, values the company at $3 billion post money. It is expected to be officially announced “soon.”

Go-Jek declined to comment. Tencent did not respond to requests for comment.

Go-Jek raised $550 million as recently as August 2016, when it commanded a valuation of $1.3 billion so this new deal has pushed that figure up considerably over a short period of time. The Information previously reported that Tencent was considering an investment in Go-Jek. Other investors in the round are not clear at this stage, but we believe them to be from the existing pool of backers.

One source told TechCrunch that Alibaba and its financial services spin-out Ant Financial held talks with the startup, but were ultimately unsuccessful. Ant Financial has since partnered with media firm Emtek to enter Indonesia. Alibaba and Tencent are fierce rivals that are not known for co-investing in deals, although both hold equity in Didi Chuxing after investing separately in Didi Kuaidi and Didi Dache which ultimately merged to create Didi (and is buying Uber’s China business).

More details in https://techcrunch.com/2017/05/03/go-jek...2-billion/

[weijian]

This is a Aug2015 article, almost 2years old but for those tech-dummies (like me), it is a good introduction! (P.S. my last impression of WECHAT was people using it to find random nearby strangers to talk to...)

When One App Rules Them All: The Case of WeChat and Mobile in China
by Connie Chan

This post is all about WeChat, but it’s also about more than just WeChat. While seemingly just a messaging app, WeChat is actually more of a portal, a platform, and even a mobile operating system depending on how you look at it.

Much has been written about WeChat in the context of messaging app trends, but few outside of China really understand how it works — and how it can pull off what for many companies (and countries) is still a far-off vision of a world managed entirely through our smartphones. Many of WeChat’s most interesting features — such as access to city services — are not even visible to users outside China. So why should people outside of China even care about WeChat? The first and most obvious reason is that it points to where Facebook and other messaging apps could head. Second, WeChat indicates where the future of mobile commerce may lie. Third, WeChat shows what it’s like to be both a platform and a mobile portal (what Yahoo could have been).

http://a16z.com/2015/08/06/wechat-china-mobile-first/