South China City (01668.HK) announced yesterday that Tencent (00700.HK) will exercise share options to subscribe for 244.8 million shares at 3.36 yuan per share. Tencent's shareholding volume will increase from 9.9% to 11.55%. Bank of America Merrill Lynch believes that this move shows Tencent's confidence in South China City and strengthens cooperation between the two sides in e-commerce logistics, which will help relieve market concerns. As a result, the bank lowered the net asset value discount of South China City from 45% to 40%, and raised the target price from 4.9 yuan to 5.5 yuan accordingly, maintaining the “buy” rating. The report mentioned that South China City spent $22.5 million this month to take a 19% stake in Makepolo (Makepolo), a B2B procurement and trading platform for small and medium-sized enterprises in mainland China. It is believed that South China City and Marco Polo will share the customer base of both parties, and it is expected that in the long run, they will explore the provision of internet financial services to SMEs. Meanwhile, Tencent's consulting team has joined South China City to assist in its e-commerce development. (ph/a) ~