Tencent Holdings snapped a four-day winning streak in Hong Kong trading after as investors worried about its struggling business, overriding a US$20.3 billion bonanza for shareholders in the form of a special dividend payout.
The WeChat operator slipped 1.4 per cent to HK$290.20 300 at 9.45am local time, halting a 27 per cent winning streak since Friday. The stock has rebounded 43 per cent from an October low going into its earnings report on Wednesday. Meituan tumbled 6.4 per cent to HK$152, the most since October 28, on concerns about stock overhang.
The Shenzhen-based firm will give away 958.1 million shares in Meituan as a special interim dividend on a 1 -for-10 basis, a stake valued at HK$159.4 billion (US$20.3 billion), according to a stock exchange filing late on Wednesday. Tencent reported a 2 per cent drop in revenue and 1 per cent gain in net income in the quarter to September 30.
The Meituan block represents 90.9 per cent of shares held by Tencent in its investment portfolio, or 15.5 per cent of the capital in the food-delivery platform operator.
The dividend-in-specie payout followed a similar decision by Tencent in 2021 to give away a block of shares in JD.com worth US$16 billion from its portfolio to shareholders. The move will put to rest speculation about Tencent preparing to dump its Meituan stake in the open market.