Update on its Tencent deal

On 11 December, Yonghui announced to sell 5% stake to Tencent (0700.HK, lastclosing price: HKD394). The details are yet to be confirmed.

Tencent will also invest in Yonghui Yun Chuang, a subsidiary of Yonghui listcothat mainly includes Super Species and Yonghui Life. With this investment,

Tencent expects to own a 15% stake in Yonghui Yunchuang.

Given that the discussion is still at an early stage and uncertainties remain,

Yonghui will remain suspended from trading from 12 December; however, thecompany has assured to confirm the details and resume trading before 18December 2017.

Deutsche Bank view

The deal implies Tencent’s plans to further explore both online and offline retailmarkets, apart from the partnership with Jingdong; despite that the details of thepartnership are yet to be formed

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