Investing in AI while reducing holdings? After Tencent was reported to plan to cash out over 10 billion Hong Kong dollars, Kuaishou confirmed that its major shareholder sold 270 million shares.

Tencent and Kuaishou have been making headlines together repeatedly this month. Just a few days after Kuaishou announced Tencent's increased investment in AI, news broke that Tencent had reduced its shareholding.

On the evening of Monday, July 6, Beijing time, Kuaishou Technology issued an announcement to the Hong Kong Stock Exchange stating that it had learned that Tencent Holdings Limited had sold over 270 million Class B shares of Kuaishou on the same day. The announcement did not disclose the price range or specific transaction size, but stated that after the sale, Tencent would no longer be a major shareholder of Kuaishou. It also noted that Tencent is confident in Kuaishou's prospects and that the strategic cooperation between the two parties will continue.

Earlier on Monday, two media outlets, citing content from relevant sales documents, reported that Tencent planned to raise funds by selling approximately 273 million Kuaishou shares, accounting for about 7.5% of Kuaishou's issued share capital. The selling price represented a discount of up to 6.2% from Kuaishou's closing price on Monday. Based on the price range disclosed in the sales documents, the transaction size was up to approximately 12.2B Hong Kong dollars, or about 1.55 billion US dollars.

Just on Thursday, July 2, Kuaishou had announced that its AI business, Kling AI, would introduce external financing, expecting to complete nearly 3 billion US dollars in funding, including strategic investors such as Tencent. The two announcements, just four days apart, revealed that Tencent's bet on Kuaishou's AI coincided almost simultaneously with its equity reduction.

Kuaishou Confirms Equity Change; Tencent Downgraded from Major Shareholder

According to a Kuaishou announcement to the Hong Kong Stock Exchange on the evening of July 6, Tencent sold a total of 272.95M Class B shares of Kuaishou on the same day through block trades to certain independent third parties with no connection to Kuaishou or its related persons.

The announcement disclosed that after the sale, Tencent's shareholding in Kuaishou would drop from approximately 15.68% to 9.37%, and Tencent would no longer be a major shareholder of Kuaishou.

Kuaishou also emphasized that the placement did not involve the issuance of new shares by the company, and the company's business operations and cooperative relationships with relevant shareholders would not be affected.

The announcement stated that Tencent expressed confidence in Kuaishou's long-term development prospects and that the two parties would continue to maintain a win-win relationship, including continuing their strategic cooperation. Kuaishou expects that the above share sale will not have any material adverse impact on the company's operations.

Media: Sales Documents Show Tencent Plans to Sell 7.5% of Shares, Cashing Out Up to Approximately HKD 12.2 Billion

Earlier on Monday, two foreign media outlets disclosed the structural details of Tencent's share sale transaction.

According to media reports citing sales documents, Tencent's wholly-owned subsidiary Tencent Mobility plans to sell approximately 273 million Kuaishou shares, accounting for about 7.5% of Kuaishou's issued share capital. The selling price range is 43.15–44.53 HKD per share, representing a discount of approximately 3.2%–6.2% from Kuaishou's closing price of 45.95 HKD on Monday.

Based on the upper end of the range, the transaction size is estimated at approximately 12.2 billion HKD (approximately 1.55 billion USD). Another media outlet reported that Tencent proposed selling Kuaishou shares worth 1.51 billion USD at a price of 43.25 HKD per share.

The above share quantity, proportion, and transaction size are all from sales documents or media disclosures, and were not listed in Kuaishou's announcement on Monday evening.

Media reports stated that Goldman Sachs and Morgan Stanley acted as joint bookrunners for Tencent's share sale. After the block trade, the remaining Kuaishou shares held by Tencent will be subject to a 90-day lock-up period.

Tencent did not publicly explain the specific reasons for the share sale.

According to a report from Yicai, Tencent responded to the above media inquiries by saying, "No comment."

Historically, Tencent has been continuously optimizing its investment portfolio structure in recent years, including reducing holdings in certain mature internet assets while maintaining strategic cooperative relationships.

Just Added Nearly 3 Billion USD Financing for Kling AI, "One In, One Out" Forms a Contrast

Four days before the share sale transaction, on Thursday, July 2, Kuaishou announced significant financing progress for its AI business. The new financing will be used for foundational model capabilities, computing infrastructure, and global expansion.

According to Kuaishou's disclosure on that day, Kling AI completed approximately 3 billion USD in financing. This round of financing involved the participation of dozens of first-tier institutions. The post-investment valuation will reach 18 billion USD, and Tencent appeared on the list of joint lead investors.

According to Kuaishou's announcement, the investor lineup for this round is impressive, bringing together three major internet companies: Tencent, Alibaba Cloud, and Baidu. State-owned industrial funds from Beijing, Shanghai, Shenzhen, Chongqing, and other places also participated, as did cultural and entertainment industry players such as Huace Film and TV and Mango Industrial Investor (Houwei Capital). Light Source Capital participated in this financing in the dual capacity of exclusive financial advisor and co-investor through its L2F Light Source Entrepreneur Fund.

Kling AI is a generative video model platform that Kuaishou is focusing on developing and is considered one of the core drivers of future growth.

Against this backdrop, Tencent's simultaneous participation in AI financing and reduction of listed company shares forms a clear contrast in capital allocation, which has also become a focus of market attention.

Looking at a longer cycle, Tencent's capital allocation strategy is gradually shifting from "broad-coverage shareholding" to a greater emphasis on efficiency and strategic focus.

On the one hand, the company optimizes capital returns by reducing holdings in mature assets; on the other hand, it continues to increase investment in new technology areas such as AI, cloud computing, and foundational models. Against the backdrop of a sustained strengthening of the AI capital expenditure cycle, this type of "structural reallocation" is becoming a normal operation for large internet platforms.

Risk Warning and Disclaimer

        Markets are risky; investment requires caution. This article does not constitute personal investment advice and does not take into account the specific investment objectives, financial situation, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article are suitable for their specific circumstances. Investment based on this article is at one's own risk.