BEIJING, September 21  (TMTPOST)— Tencent Holdings Ltd. dismissed a report about its further cutting stakes in Chinese tech firms when the whole industry has been facing challenges amid headwinds including macroeconomic slowdown.

Source: Visual China

Tencent doesn’t have any plan, timetable or specified amount target to trim stakes in its portfolios, and it has no need to sell any shares for repurchase since the current cash flow can provide enough funding support, an official at the company told Chinese media outlet The Paper. Tencent has not contacted any investment banks for possible offloading yet, the official added, as part of response to the recent report.

Earlier this week, the Wall Street Journal’s sources said Tencent is weighing to reduce more of its investment portfolio to fund buybacks and refocus its growth strategy. The sources identified possible divestments of ride-hailing giant Didi Global, food delivery juggernaut Meituan and KE Holdings Inc, a leading online real estate brokerage company also known as Beike. Through such divestment, Tencent was reported to support repurchases to prevent negative effect on its share prices due to stake reduction of Naspers, the largest shareholder holding Tencent via its unit Prosus. Tencent was also said to seek cash in some matured assets to invest other fields including videogames and healthcare.

Reports last month said Tencent is considering dumping most or all of its Meituan holdings and has engaged with financial advisors these months about the possible stake sale. Days after these report, Tencent executives told analysts in an earnings call that the reported sales plan was not accurate. Tencent’s shares and portfolios are highly undervalued at the moment, and the company would consider cutting troubled investments and more forms of reward to make shareholders benefited from investment decisions, the management said.

The financial results released last month showed Tencent missed analysts’ estimates in both the top line and bottom line during the second quarter of the year. The revenue fell 3.2% year-over-year (YoY) to RMB134 billion (US$19.8 billion) in the quarter, the first ever yearly decline for the Chinese tech giant. The net income dropped 56% YoY to RMB18.6 billion, compared with the market projection of RMB25.03 billion. Revenue from gaming, one of Tencent’s core businesses, decreased 1% to RMB41.9 billion, while another major segment fintech and business services failed to maintain robust growth with a modest 0.7% increase in revenue.

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