Tencent distributed JD.com shares to shareholders, which not only reduced its holdings in disguise, but also saved cash for dividends, and incidentally responded to the national call for "common prosperity".
Kill three birds with one stone, one word: absolutely.
Tencent reduced its holdings in JD.com in disguise
Early in the morning of December 23, Tencent's announcement stirred up thousands of waves in the capital market:
Tencent will pay dividends in mid-term dividends to shareholders about 460 million shares of JD.com for in-kind dividends.
The announcement shows that the value of these JD.com shares that Tencent gave to shareholders was HK$127.7 billion on the 22nd.
According to the announcement, qualified shareholders can exchange 1 jd.com ordinary share for every 21 shares of Tencent shares held. For retail investors holding less than 100 shares, Tencent also gave a cash replacement payment plan in the announcement.
But how much to send depends on the final decision of Tencent's board of directors. At present, the tentative plan is that Tencent will sell the corresponding JD shares in March next year, or calculate the closing price of jd. shares on the distribution date of JD.com in January next year.
Source: Tencent announcement
Therefore, if investors want to make money, they also have to see whether JD.com will be able to compete when the time comes.
At the same time, this also means that Tencent has reduced its holdings in JD.com in disguise. After the dividend, Tencent's shareholding in JD.com will be reduced from 17% to 2.3%, and it will no longer be the largest shareholder. Tencent President Martin Lau will also step down as a director of JD.com.
This kind of reduction and dividend operation has also made A-share shareholders have a long insight: the first time they saw the stock dividends of other companies, A-share companies learned it!
As soon as the news came out, Tencent rose by about 2% at the opening, and JD.com still fell by 10%. After all, the reduction of major shareholders will always have a large or small negative impact on the company, but it is not too serious.
Tencent's investment strategy has always been to invest in companies in the development stage, bring long-term capital to the invested companies, facilitate their development and expansion, and then exit when the portfolio companies can raise their own funds for their future plans. In Tencent's view, JD.com has now reached this stage, so now is also the right time for Tencent to exit investment.
The medium-term dividend is to share the investment results of JD.com with Tencent shareholders and better realize the return on shareholder investment.
Duan Yongping, a big man in the investment industry, also expressed his views:
Tencent has invested in many companies over the years and has many successful cases. Using this method to give back shareholders is also a good way, at least the company does not have to decide whether to sell or not to sell, when to sell... I would vote in favour, although it doesn't seem like a shareholder vote is required.
Source: Snowball
In the eyes of investors, Tencent's wave of operations not only highlights its emphasis on shareholder interests, but also saves cash flow for the company, and more importantly, it is to go with the trend.
What is the true intention?
Tencent's intention this time is actually very obvious. Tencent is not optimistic about JD.com, but responds to the call of the times and conforms to the trend of history.
Whether it is Google or Facebook abroad, or Tencent and Ali in China, most enterprises will use capital to penetrate into other related markets and fields after obtaining a large amount of profits, and over time form a stronger control over the entire economy and society.
As a result, we can see that, especially in the past year or two, a series of domestic anti-monopoly measures have been carried out one after another in order to curb this control force.
From "strengthening anti-monopoly and preventing disorderly expansion of capital" as one of the eight key tasks in 2021, to the establishment of the National Anti-Monopoly Bureau, to Ali, Meituan and other enterprises that have successively encountered anti-monopoly penalties, the anti-monopoly banner of the regulatory level continues to wav.
Tencent is naturally also the object of attention. In addition to JD.com, Tencent's investment in China also includes Internet companies such as Meituan, Pinduoduo, Kuaishou, Shell, Station B, Vipshop, Zhihu, and Daily Excellent Fresh. In the field of games, Tencent has invested extensively around the world.
It seems that Tencent's ecology is very large, and the market value is trillions. But in fact, now macro, supervision, business operations have pressure indicators, any big thunder, minutes will make Tencent even with the investors behind the head are bigger.
If you want to protect yourself, you can only go with the flow and retreat. Tencent must also realize that it should converge and converge, and at the same time, it can give back to shareholders and respond to common prosperity, why not enjoy it? It is no wonder that some investors sigh: compared with Tencent, Ali, who is also a tyrant, is really a big difference.
It is foreseeable that Tencent's distribution of JD.com shares will not be an isolated case, and more and more cases like this will appear in the future, and eventually everyone will cooperate and compete in a relatively fair track.
In general, Tencent's operation has reduced its own risk of being supervised by anti-monopoly, and it is better to take the initiative now than to be forced to sell later.
Do I have to pay taxes?
In addition to the feelings of Tencent's wave of "self-protection", many shareholders feel that this way "saves themselves taxes".
Some professionals told Yijian Finance: "The reason why there are investors cheering for the so-called "saving taxes" is actually because the company sends shares, and if it is not through cash, the broker does not withhold and pay. However, subsequent shareholders still need to declare their income and then pay taxes according to law. The specific tax standards should be divided into the type of shareholder, the place of residence of the shareholder, the investment method and so on. ”
It can only be said that the "provincial taxes" are just those shareholders who want to follow the "Weiyas" who want to evade taxes...
In fact, whether it is a cash dividend or a cash dividend, the party that receives the dividend is required to pay taxes, except for those individual investors and enterprises that have reached the tax exemption standard. For example, those who have held the shares in A shares for more than 1 year, or who directly open Hong Kong stocks in Hong Kong to buy non-H shares, can also be exempted from taxation.
Shareholders need to pay taxes, so does Tencent need it?
Under normal circumstances, Tencent, as a dividend payer, is not subject to taxation.
But what is interesting about Tencent's operation this time is that it distributes JD.com shares, and accounting professionals told Yijian Finance: "If it involves the transfer of domestic assets, then according to our tax law, Tencent's operation will be regarded as sales, and it should pay 10%-25% income tax according to the proceeds of the reduction." ”
This leads to a more interesting question, is JD.com a domestic resident enterprise? Are Jd.com shares owned by Tencent counted as domestic assets? In fact, Jingdong said very clearly in the annual report: at present, Jingdong is defined as a non-resident enterprise, but there is still a risk of being identified as a resident enterprise by the tax authorities.
Source: JD.com 2020 Annual Report
In this case, we do not know the specific determination of JD.com. If JD.com is finally identified as a domestic resident enterprise, then Tencent naturally needs to pay taxes.
A breakthrough in the underlying logic of the Internet
Returning to Tencent's operation itself, Tencent's move prevents the impetus of disorderly expansion of capital, which is a good thing for minority shareholders in any case. Behind it also reflects the changes in the underlying logic of the current domestic Internet.
In the past, with the blessing of the rapid development of dividends such as economy and technology, Companies such as Tencent have gradually grown into the kings of China's Internet jianghu through investment and acquisition.
However, in today's context of anti-monopoly and anti-capital disorderly expansion, enterprises are required to focus on their main business in a down-to-earth manner, and it is not allowed to become a monopoly oligarchy.
China's mobile Internet industry has reached a mature period, and users and traffic have basically reached the peak. More and more enterprises are focusing more on doing digitalization and industrial services in a serious and down-to-earth manner. I believe that there will be more large enterprises in the future, and Tencent will make the same decision, but it is only a matter of implementation method and rhythm.
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Author 丨95
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