On April 26, Better Life Commercial Chain Share Co.Ltd(002251) received a letter of concern from the Shenzhen Stock Exchange, asking the company to check whether Linzhi Tencent and JD bonneng used insider information to accurately reduce their holdings.
According to the announcement, the average reduction price of Nyingchi Tencent is 9.75 yuan / share, and the average reduction price of jingdongbangneng is 11.28 yuan / share. The two companies are backed by Tencent and jd.com, China’s two largest Internet companies.
Tianyan survey shows that Nyingchi Tencent is 100% owned by Tencent industry fund. As the most front-end part of Tencent’s huge investment business, Nyingchi Tencent has made 75 foreign investments and deployed more new retail and cultural entertainment industries. However, in the market verification, the investment of these two sectors was less than expected, and even made the giants suffer serious losses.
sold new retail, Tencent also miscalculated
Back in 2018, Zhang Haixia, the Better Life Commercial Chain Share Co.Ltd(002251) shareholder, and Xinwo fund transferred their Better Life Commercial Chain Share Co.Ltd(002251) 4% equity and 2% equity to Nyingchi Tencent respectively; Zhong Yongli and Better Life Commercial Chain Share Co.Ltd(002251) group, the shareholders of the company, respectively transferred 3% and 2% equity of the listed company to JD bonneng.
According to the announcement, the transfer price is 17.11 yuan / share, and Nyingchi Tencent and jingdongbang can pay the transaction consideration of 887 million yuan and 739 million yuan respectively. Since then, in June 2018, Nyingchi Tencent has become the top ten shareholders of Better Life Commercial Chain Share Co.Ltd(002251) with 518342 million shares for the first time.
An investor told the reporter of “science and Innovation Board daily” that this investment is Tencent’s layout in new retail. “However, after several years, the new retail did not bring the expected revenue to Tencent.”
In 2018, with the rise of new retail concepts, Alibaba and Tencent launched a new round of competition in this field. Among the Alibaba retail team, intime, Suning, HEMA Xiansheng, Sanjiang Shopping Club Co.Ltd(601116) , Bailian Group, Lianhua supermarket, New Hua Du Supercenter Co.Ltd(002264) and Gaoxin retail have successively joined.
Tencent also showed no weakness. In addition to its old friend JD, there are vipshop, daily Youxian, Yonghui Superstores Co.Ltd(601933) , Wanda commerce, Carrefour China, Hla Group Corp.Ltd(600398) , Better Life Commercial Chain Share Co.Ltd(002251) , etc. Among them, the negotiation with Carrefour China was terminated in 2019.
“But so far, both sides have failed in the new retail field. Coupled with the impact of covid-19 epidemic, the investment loss is serious.” The above investors told the reporter of the science and Innovation Board daily.
Taking Yonghui Superstores Co.Ltd(601933) invested by Tencent as an example, this chain leader, which originally started from supermarket, tried new retail operation with the blessing of Xu Xin, but reflected on the “pain of new retail” in 2021.
the market value of Yonghui Superstores Co.Ltd(601933) also fell from 110 billion yuan to 37.9 billion yuan, a decrease of nearly 70%. In this investment, Tencent spent 4.2 billion yuan to win 5% shares of Yonghui. At present, the corresponding value of this 5% shares is only 1.895 billion yuan.
Although Tencent’s investment was not successful, lin did not withdraw. Vipshop, daily excellent fresh and Hla Group Corp.Ltd(600398) are all without exception, and have not got rid of the situation of investment loss.
As far as daily Youxian is concerned, Tencent began to participate in the company’s round a financing in 2015 and supported by round D financing of US $450 million in 2018. Despite the success of listing in the United States, in this wave of decline in zhonggai shares, the daily Youxian share price is only $0.788, while Tencent holds 8%.
An investor who pays attention to the US dollar fund once pointed out to the reporter of the science and Innovation Board daily that the biggest risk of zhonggai shares comes from the policy. After the fall, the share prices of some companies can go back. For example, Alibaba and other mature companies with market share, the fundamentals of the company will remain after the valuation, but some companies may never get up. “Because of the epidemic, interest rate hikes, policies and other factors, their fundamentals could not be continuously improved, and finally became a mountain to suppress the stock price.”
Hla Group Corp.Ltd(600398) the same is true. In recent years, it has been constantly confronted with high inventory, unsalable goods, and even questioned whether the business model has a future. In 2018, another Tencent company, Tencent Puhe, sold 2.5 billion yuan to invest in “men’s Wardrobe”.
cultural and entertainment investment also encountered “black swan”
For Nyingchi Tencent, since it is 100% owned by Tencent industrial fund, the idea of Tencent business expansion is also run through in foreign investment.
From the legal representative of Nyingchi Tencent, Li Zhaohui served as the investment director of Bertelsmann Asia investment fund before becoming the executive director and managing partner of Tencent industry win-win fund, responsible for the equity investment of the fund in the fields of science and technology, media, education and outsourcing in China and the Asia Pacific region.
At the same time, after joining Tencent, he is also responsible for investment and M & a business in SNS, games and wireless fields. Games, media / entertainment are one of Tencent’s most important businesses.
In this field, Nyingchi Tencent has successively participated in the pre-A round of financing of pickup Lightyear, the D round of financing of HowNet, Zanadu zannadu equity financing, Penguin fairy tale a round of financing, network element Shengtang entertainment strategy financing, sky mutual entertainment Angel round of financing, Linghe film and television a round of financing, and Hainan Dasheng entertainment a round of financing, acquired Xinli media, controlled Huya, Bona film equity financing, etc.
Among them, Xinli media and bona film are well-known film and television drama production companies in China, while Linghe film and television has produced “old nine gate” and “Diablo” series, and is currently producing popular IP “three body”. The mutual entertainment in the sky is mainly based on the adaptation of literary IP; Hainan Dasheng entertainment is a live broadcasting platform for games, competitions, star variety shows and so on.
Xiao Quanyong, executive director of Dingju equity investment fund, said in an interview with the reporter of the science and Innovation Board daily that the return on capital investment in culture and entertainment in the past two years was not satisfactory.
\u3000\u3000 “On the one hand, when Tencent invested in Xinli media in 2018, the valuation was very high, and companies with a valuation of 100 times frequently appeared in the A-share market. However, after the tax event and the salary limit order, the review of TV dramas was delayed, resulting in some TV dramas that could not be broadcast even if they were shot, and the investment drifted. On the other hand, the cultural and entertainment company has a feature that it produced a popular model this year with good performance, but there was no popular model in a year or two, so the performance is ugly, so it is difficult to use it Cash flow valuation discount algorithm evaluation. This led to the impairment of goodwill in a large number of M & A projects around 2018, which dragged down the performance of listed companies. Some companies have been st and even face the risk of delisting. “
In the market fluctuation, the valuation of media companies also began to discount in half. “The valuation of such companies has fallen from 100 times to 40 times. In the recent sharp decline, the valuation has also fallen further.” Xiao Quanyong said.
At the same time, during the period when the release of the game version number was stopped, some investors lamented: “I don’t know how many projects didn’t survive…”
In the investor’s view, as a giant, Tencent has a lot of investment, and its performance is mostly supported by games. “However, the distribution of game edition numbers was stopped for a time, coupled with the difficulty of A-share listing of cultural and entertainment companies, they can only be listed in Hong Kong, which is reflected in the weak performance growth in the statements.
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The above-mentioned investors told the reporter of the science and Innovation Board daily that Tencent will invest in many early-stage companies in terms of investment, but this is actually the general playing method of the head company. “For some projects, Tencent doesn’t do it by itself. Let young companies test the water. Once they succeed, they can take them directly. It doesn’t matter if they die.”
However, Tencent’s investment in pre IPO is due to the high market breaking rate. The hot projects pursued irrationally 1-2 years ago now want to exit through the capital market, but they face the phenomenon of upside down valuation in the primary and secondary markets.
Typically, as recently known, this online Q & a community platform was also the key layout area of Tencent. “At that time, the valuation of Tencent was more than 20 billion yuan, but after the dual listing, the valuation was only HK $7.76 billion. There was no doubt that the IPO had a loss.” The above investors continued.
According to the financial report of Tencent in 2021, the net profit of the company increased by 41%; However, under non IFRS, net profit increased by only 1% year-on-year.
The above investors interviewed by the reporter said that under the international financial reporting standards, Tencent needs to include the profits or losses created by changes in the fair value of the invested companies and mergers and acquisitions in the current report. This change is not considered for non IFRS.
In other words, if you take away the investment income and only look at the growth rate of the main business, Tencent has almost no growth. “But many cases show that Tencent’s investment income is impaired in fair value, which needs to be considered for Tencent.”
