Source: Finance Association
① How many shares of Tencent does Prosus currently hold? ② What is the Tencent buyback situation? ③ How do organizations view Tencent's buybacks?
Since Prosus, the majority shareholder of Tencent, announced a reduction in holdings, the market is concerned that shareholders' holdings reduction will put pressure on the trend of Tencent Holdings (00700.HK). Furthermore, the agency pointed out that Tencent Holdings' massive buyback basically offset the pressure on the majority shareholders to reduce their holdings.
As of press release, Tencent Holdings declined 0.07% to HK$305.2.
First, let's review the process of Prosus reducing its holdings in Tencent
On June 27, 2022, Prosus announced that it will sell its Tencent shares in an orderly manner. It plans to reduce its total holdings by no more than 150 billion US dollars. The average daily sales of company shares will not exceed the average daily turnover of the company's shares by about 3%-5%.
Note: Changes in Prosus's shareholding
Judging from the chart, the number of shares held by Prosus in Q3 2022 was 2,675 billion shares, a decrease of 90 million shares compared to 2,765 billion shares in the second quarter of the same period.
In Q4 2022, the number of shares held by Prosus was 2,577 billion shares, a decrease of 98 million shares from the previous quarter.
In Q1 2023, the number of shares held by Prosus was 2.502 billion shares, a decrease of 57 million shares from the fourth quarter of last year.
In Q2 2023, Prosus held 2.45 billion shares, a decrease of 52 million shares from the previous quarter.
In Q3 2023, the number of shares held by Prosus was 2,409 billion shares, a decrease of 41 million shares from the previous quarter.
In Q4 2023, the number of shares held by Prosus was 2,367 billion shares, a decrease of 45 million shares from the previous quarter.
Judging from the chart above, Prosus's efforts to reduce its holdings in Tencent every quarter from 2022 to 2023 have slowed down, from 98 million shares in Q4 2022 to 45 million shares in Q4 2023.
According to the latest data, Prosus, the majority shareholder of Tencent, holds 2,324 million shares.
Note: Current number of shares held by Prosus
Tencent recently announced a 100 billion repurchase
Meanwhile, Tencent Holdings continued to repurchase during the same period. In 2023, Tencent's repurchase amount reached HK$49 billion, a record high in the past ten years. In 2024, Tencent also announced that it would expand the repurchase scale to over HK$100 billion.
As of the first quarter of this year, Tencent's repurchase amount reached HK$14.8 billion, with an average daily repurchase amount of HK$824 million.
The agency said that the pressure on major shareholders to reduce their holdings was basically offset
According to various reports, a number of brokerage analysts said that along with Tencent's own major buybacks and the obvious weakening of Prosus's sales strength, the pressure that Prosus's long-term open repurchase plan brought to Tencent's secondary market has basically been offset in 2024.
For example, Huachuang Securities pointed out that Tencent's 100 billion repurchase plan is expected to offset shareholders' financial pressure to reduce their holdings. The brokerage firm pointed out that under the current progress of reducing holdings, the HK$100 billion repurchase plan is expected to completely offset the financial pressure to reduce holdings and have a positive effect on stock prices.
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