(Yicai) Sept. 15 -- Tencent Holdings has announced its 77th share repurchase of the year, bringing the Chinese internet titan’s total investment in shares buyback to HKD27.7 billion (USD3.5 billion) this year.
Tencent bought back nearly 1.3 million shares at a price of between HKD318.60 and HKD322.60 (USD40.71 and USD41.22) apiece for a total of about HKD400 million (USD51.1 million), the Shenzhen-based company announced yesterday.
Since the beginning of the year, Tencent bought back 81.5 million shares in 77 batches for a total amount of HKD27.7 billion, according to statistics from Wind. As the average repurchase price was HKD340, the firm realized a loss of HKD1.6 billion, based on its closing price of HKD320 yesterday.
Tencent’s shares [HKG: 0700] were trading down 0.6 percent at HKD318 as of 2.40 p.m. in Hong Kong today.
Share buybacks remove some of a publicly traded company’s shares from the stock market, with the aim of shoring up the price.
Meanwhile, Tencent’s major stakeholders are selling their equities.
On June 27 last year, Prosus and its controller Naspers, the biggest shareholder of Tencent, announced they would sell their Tencent shares in an orderly way through floor trading, using the proceeds to support their own share repurchase plans. Afterward, other major shareholders cut their holdings in Tencent to 26 percent from 29 percent as of April 25.
In the first half, the shares sold by Tencent’s shareholders were more than double those repurchased by the company.
Some foreign investors will continue to sell their equities in Tencent, and the company’s repurchase efforts will not be enough to support the market, said Lin Jiayi, general manager of Xuanjia Private Fund Management. It is uncertain whether the situation will improve in the future, Lin added.
Tencent’s net profit jumped 41 percent to CNY26.2 billion (USD3.6 billion) in the first half from a year earlier, according to the firm’s latest earnings report released on Aug. 16. Revenue rose 11 percent to CNY149.2 billion (USD20.6 billion).
Editor: Futura Costaglione