Benzinga | Jan 19, 2022 11:39AM EST

How Tencent Aims To Dodge China's Tech Crackdown



* China's campaign to rein in rival giants like Alibaba Group Holding Ltd (NYSE:BABA) and Meituan (OTC:MPNGY) has prompted Tencent Holdings (OTC:TCEHY) to adopt a more subtle investment strategy by focusing on overseas expansion, Financial Times reports.

* As it navigates a murky regulatory landscape at home, Tencent is expanding abroad, with 44 deals in 2021, up from 17 in 2020, across industries like gaming, e-commerce, health care and fintech.

* Tencent hired aggressively in Singapore to ride the southeast Asian tech wave.

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* Tencent's largest shareholder, Prosus, just raised $5.25 billion of new debt last week for purposes "including acquisitions and investments."

* Tencent increased its stake in Finnish mobile game company Supercell in the past weeks and invested in Monzo, the British online bank.

* "Going forward, we expect [Tencent] to invest less in platform companies to avoid the impression of forming [alliances] through investments, which is seen as problematic under China's anti-monopoly focus," said Bo Pei, of US Tiger Securities.

* Tencent's investments in 2021 rose to a record 270 from 174 the prior year, but thereare signs of its outlays beginning to slow.

* In the fourth quarter, Tencent's China deals totaled just one-third of the number done in the first quarter.

* Several venture capitalists admitted that Tencent had recently asked to leave its name off the press releases that start-ups issue to tout new funding rounds, pointing to the recent fundraisings for product design tool Lanhu and enterprise software provider XSKY.

* Tencent denied there had been any change to its investment strategy.

* Price Action: TCEHY shares were up 3.12% at $57.74 midday Wednesday.