(Yicai Global) Sept. 21 -- Chinese internet giant Tencent, creators of social messaging app WeChat and QQ, hold a 45 percent stake in Beijing Sogou Technology Development Ltd. [NASDAQ: SOGOU] and became its largest shareholder in place of news portal Sohu [NASDAQ: SOHU].
However, Sohu and its management still have the largest voting rights in Sogou, a Chinese search engine, according to the latest US Securities and Exchange Commission report.
Sohu now holds 38.35 percent of equity in Sogou and Tencent holds a 45 percent stake. Although the shareholding ratio of Tencent has risen to 45 percent, over half of the shares are non-voting class B common shares. Therefore, Sohu remains the de facto controlling shareholder of Sogou as all of its shares in Sogou are class A common shares with voting rights.
Back in Sept. 2013, Tencent announced a cash injection of USD448 million into Sogou and the merger of their browser and QQ's predictive text software with the existing businesses of Sogou. Upon completion of the transaction, Tencent gained 36.5 percent fully diluted shares of Sogou and stated then it would increase its shareholding ratio to about 40 percent.
Sogou's revenue reached CNY1.15 billion (USD191.6 million), representing a 27 percent growth from last year. The non-GAPP net profit in the second half reached CNY220 million, an increase of 30 percent compared with the same period last year, according to Sogou's second-quarter earnings report.