Shulou(Shulou.com)11/24 Report--

Beijing, September 21 (Xinhua) A series of share buybacks by Tencent Holdings have failed to restore investor confidence in the online gaming giant, whose share price is nearing its 2018 low.

Tencent, China's largest company by market capitalization, has spent nearly $1 billion on share buybacks in the past month, bringing its total buybacks this year to $2.3 billion (16.2 billion yuan), according to data. Tencent's pace of share buybacks began to accelerate after major shareholder Prosus NV said at the end of June that it would gradually reduce its stake in Tencent.

Although Tencent buys the company's shares every day this month, its share price has fallen more than 60% from its January 2021 peak, reducing its market capitalization by about $580 billion (4.1 trillion yuan), according to foreign media calculations. it has become the stock with the largest evaporation in the world's market capitalization since then. Macroeconomic and other factors have become the main resistance that Tencent faces.

"Tencent is under pressure from major shareholders to sell its shares, and the buyback played a role, but did not provide enough support," said Banny Lam, head of research at Guangyin International Investment. "it still needs some policy support from the government to turn the situation around."

Tencent suffered its first-ever decline in revenue in the second quarter as it struggled to cope with the macroeconomic impact on its main business. Although the new game has been approved, there are still doubts among investors about the company's growth prospects and the sell-off of Prosus. Prosus said on September 8 that it had sold 1.1 million Tencent shares, reducing its stake to 27.99 per cent. A previous document also showed that Prosus sold more than 3.9 million Tencent shares in the first half of the year.

Tencent is rumoured to be considering spinning off more of its large portfolio in an attempt to fund a series of share buybacks and readjust its growth strategy. In response, Tencent responded that there is no plan or timetable to reduce its stake.

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