slid in US trading on Monday after the US defence department designated the technology firm a Chinese military company operating in the US.
Shenzhen-based Tencent was among several companies that were labelled as Chinese military entities in a Federal Register filing. Contemporary Amperex Technology and Autel Robotics were also included on the roster. Companies on the Chinese military list face delisting from US exchanges and deletion from global benchmark indexes.
Tencent didn’t immediately respond to a request for comment sent outside of regular business hours. The company’s US depositary receipts were down as much as 7.3% at US$49.31, notching the biggest intraday decline in nearly three months. Naspers-controlled Prosus, which owns about a quarter of Tencent, fell as much as 7.2% in US trading. Markets in Johannesburg had already closed when news of the designation emerged.
Tencent is one of the most valuable tech companies in China and has already suffered from the country’s domestic consumption slowdown over the past year. The social media and entertainment leader has, however, fared better than rivals — in part because of its line-up of games and growth in its fintech division. Its Hong Kong-listed stock gained more than 42% last year.Some Chinese firms have successfully fought to be removed from the US list.
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