(Yicai Global) Sept. 20 -- Shares of Yuwell Medical Equipment and Supply rose after the firm said Chinese internet giant Tencent Holdings intends to spend CNY291 million (USD41.5 million) to buy a 20 percent stake in its first aid equipment unit.
Yuwell's stock price [SHE: 002223] surged as much as 5.4 percent to CNY28.5 (USD4.10) intraday but closed 0.3 percent lower. The shares are almost 30 percent down this year.
Xunjie Medical Technology, a subsidiary of Yuwell, is planning to introduce a strategic investor called Social Innovation Xiangshan Technology, the Jiangsu province-based medical firm said in a statement yesterday. Tencent owns 99.9 percent of Social Innovation Xiangshan's shares.
Xunjie mainly makes semi-automatic defibrillators and cardiac monitoring products. Yuwell acquired German defibrillator brand Primedic in 2017, incorporating it under Xunjie.
Medical equipment is a rare target for the WeChat operator as Tencent tends to invest in consumer internet segments such as games, entertainment, retail, and education. However, in the past five years, it has been also paying attention to artificial intelligence, robotics, and Big Data.
Tencent's investments have been shrinking this year. The fair value of shares of listed companies held by Tencent dropped to CNY601.9 billion (USD85.84 billion) as of June 30, down by nearly 39 percent from Dec. 31, 2021, because the tech firm has reduced its holdings amid sliding stock prices.
Social Innovation Xiangshan was established with a capital contribution of about CNY668 million this month. Its business includes corporate management consulting and investment activities.
Editor: Emmi Laine, Xiao Yi