Meituan was heavily reduced by Prosus, cashing out nearly 4.3 billion, indicating that the investment lacks potential
South Africa's Naspers subsidiary Prosus significantly reduced its stake in Meituan, cashing out approximately HKD 4.3 billion, with its shareholding dropping to 3.6%. Prosus began selling Meituan shares in July, cumulatively cashing out USD 539 million. The CEO of Prosus stated that the reduction was aimed at optimizing the stock buyback strategy and pointed out that Tencent has growth potential compared to its American counterparts
Market concerns about Meituan (3690) intensify as it faces fierce competition in the food delivery business, while also experiencing significant sell-offs by Prosus, the internet investment flagship under South Africa's Naspers. As of the end of November, Prosus's stake in Meituan has decreased to 218 million shares or 3.6%, down by 39.1 million shares since early July this year.
According to Prosus's interim report, the sell-off began in July, during which it sold Meituan shares worth USD 249 million, and in October, it sold shares worth nearly USD 300 million, totaling approximately USD 539 million (about HKD 4.28 billion), although the number of shares sold was not disclosed.
Tencent has significant growth potential compared to its American peers
Prosus CEO Fabricio Bloisi stated that the funding for the company's unlimited share buyback program comes not only from reducing its stake in Tencent (700) but also from selling underperforming investments. As of the end of September, Prosus had cumulatively sold 0.7% of Tencent, cashing out USD 4.6 billion (about HKD 35.88 billion), and sold 7.0893 million shares of Tencent between October and November, cashing out USD 586 million.
He also mentioned that considering the price-to-earnings ratio, Tencent has significant growth potential compared to its American peers, so Prosus is optimizing its stock buyback strategy, "We will continue to maintain the current public stock buyback program but will not disclose the names of other companies (planned for reduction)."
