Citigroup said it was surprised by Tencent Holdings (00700.HK) selling down its
stake in Kuaishou (01024.HK), noting Tencent had earlier signalled it might use
its investment portfolio to fund shareholder returns. The bank flagged
Kuaishou’s low valuation and that Kuaishou portfolio company Keling recently
completed a private round in which Tencent invested about $200m for a 1.12%
stake, suggesting Tencent may be reallocating older holdings into new AI
investments. Citigroup said the sell-down could hurt Kuaishou market sentiment
and prompt concern about further disposals of Kuaishou or other investee stakes;
nevertheless, with Kuaishou’s fundamentals unchanged and Keling showing
potential, Citigroup maintains a Buy rating and PT HK$72.
