Baba, Tencent, Xiaomi are backers of big US IPOs

0 1

Signage for digital payment services Alipay by Ant Group, an affiliate of Alibaba, and WeChat Pay by Tencent are displayed outside a currency exchange in Hong Kong, China, on Tuesday, Sept. 1, 2020.

Chan Long Hei | Bloomberg | Getty Images

BEIJING — As China’s anti-monopoly and data security crackdown creeps into restrictions on U.S. IPOs, analysis shows that some of the country’s biggest tech companies are deeply invested in those overseas stock offerings.

Gaming and social media giant Tencent is by far the dominating corporate shareholder, with significant stakes in half of the 25 largest fundraises by Chinese companies issuing American Depositary Receipts (ADRs) in the U.S. since 2017. That’s according to CNBC analysis of publicly available data accessed through Wind Information and S&P Capital IQ.

Chinese e-commerce giant Alibaba has a few holdings in the list of 25 companies, while other major Chinese tech companies like Xiaomi, Meituan and Baidu each have stakes in one or two of the stocks, the analysis found. Also appearing frequently, typically with smaller stakes, were U.S. asset managers BlackRock and Vanguard.

While Shenzhen-based Tencent is best known for its video games and WeChat messaging app that’s ubiquitous in China, the company has also grown into an investing giant.

Tencent’s holdings in publicly listed companies last year rose by 785.11 billion yuan ($122.7 billion) — more than the 160 billion yuan ($25 billion) in profit reported for the year, according to the company’s annual report. That’s not including its subsidiaries.

The company itself is the largest listed in Hong Kong by market valuation.

Tencent said Saturday it was notified by the market regulator of “its decision to halt the merger of Huya and Douyu based on the results of its antitrust review.” Both companies are Tencent subsidiaries that listed in the U.S. in the last three years.

However, on Tuesday China’s market regulator disclosed it approved Tencent’s deal to privatize U.S.-listed search engine and text-input company Sogou.

Regulation intensifies

For many start-ups in China, having a big tech company as a backer has often meant access to vast amounts of data on consumer preferences.

But China’s internet industry has also been ruthless. In a 2018 book called “AI Superpowers, China, Silicon Valley and the New World Order,” Google’s former China head Kai-Fu Lee said the local tech world resembled gladiator fights where nothing was off limits, from copying innovations to launching smear campaigns.

After years of loose regulation, China has intensified its crackdown on massive, homegrown tech giants in the last several months.

Read more about China from CNBC Pro

Read original article here

Denial of responsibility! Swift Telecast is an automatic aggregator of the all world’s media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials, please contact us by email – [email protected]. The content will be deleted within 24 hours.

Leave A Reply

Your email address will not be published.