Tencent announces share awards for selected employees despite falling earnings
Published: Dec 03, 2021 02:06 AM
Tencent's logo File photo: IC

Tencent's logo File photo: IC

Chinese internet giant Tencent on Wednesday announced share awards of over HK$80,000 ($10,266.45) each for 25,700 employees, despite a quarterly decline in earnings amid regulatory changes. 

In a filing with the Hong Kong stock exchange late Wednesday, Tencent revealed plans to award a total of 4,410,829 shares to 25,700 people including average employees, members of the board of directors, experts and advisors under a company share award scheme, the National Business Daily reported on Thursday. 

Tencent’s shares in Hong Kong closed at HK$468.8 on Wednesday. Based on that price, the share award is worth HK$2.07 billion, meaning a gift of more than HK$80,000 per person, read the report. 

By the end of September, Tencent had a total of 107,348 employees, per its latest quarterly fiscal disclosure. This suggests that close to 25 percent of its workforce is entitled to the share award. 
The share award announcement outshone the social networking and gaming behemoth’s lackluster earnings for the third quarter.

Tencent's revenues were up 3 percent on a quarterly basis at 142.4 billion yuan ($22.29 billion) for the third quarter, while its net profit fell by 7 percent to 39.5 billion yuan during the quarter, which was still higher than market expectations. The company's earnings, not defined in International Financial Reporting Standards (IFRS), also declined 7 percent to 31.8 billion yuan for the quarter.

The internet sector including the domestic gaming sector has had to face new regulatory and macroeconomic developments over the past quarter, Tencent said in its quarterly disclosure filed with the Hong Kong stock exchange. The firm promised to "proactively embrace the new regulatory environment, which we believe should contribute to a more sustainable development path for the industry."

The latest share award followed an earlier package of awards Tencent disclosed in July to 3,300 people, each of whom would be awarded 340,000 yuan based on Tencent’s closing price of HK$561 per share on the day of the announcement.

Tencent is not alone among its domestic internet peers in offering share award schemes to inspire employees.

In July, Chinese smartphone vendor Xiaomi granted just over 70 million shares to 3,904 employees, with each of them awarded more than 400,000 yuan.
The Beijing-based tech conglomerate also reported a slowdown in its revenue and net profit growth in the third quarter.
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