Sinopec nails acquisition of Chevron African assets Through deal, Chinese group lands first refinery, other key interests on continent
Chinese internet services provider Tencent Holdings Ltd posted a hefty increase in net profits for 2016, citing its strategy to connect its online services as the main success driver.
The company behind the WeChat instant-messaging app said the profit attributable to its equity holders for the year ended Dec 31 surged 43 percent to 41 billion yuan ($5.95 billion), from 28.8 billion yuan a year earlier. Revenues swelled 48 percent to 151.93 billion yuan from the previous year’s 102.86 billion yuan.
The company attributed the growth to smartphone games, social and performance advertising, digital content sales and emerging businesses such as paymentrelated services.
Tencent recommended paying a dividend of HK$0.61 per share (8 cents) for the period, a nearly 30 percent increase from the previous year.
The company stated it had strengthened its connection strategy last year to make its social platforms more interactive for users, and to connect its social platforms to a broader range of online and offline services. WeChat remained China’s most-used app in 2016, with QQ — another Tencent platform — taking second place, the China Internet Network Information Center said in January.
Tencent’s social media dominance means that its bottom line depends on selling in-game items to the country’s internet population and advertising to those users. As larger brands tighten their advertising budgets, smaller advertisers on WeChat drove the growth in Tencent’s performancebased advertising business last year.
percent
The company also developed its mini program feature for WeChat, which offers users apps within the instant-messaging platform itself. The initiative was launched earlier this year and hosts stripped-down versions of popular apps, letting users order and pay for services without ever leaving WeChat.
“For this year, we intend to further our connection strategy by extending our ecosys- tem around our core social and communication platforms through adding more services and smartphone games, expanding our advertising market share, growing digital content subscriber bases, enhancing payment related services and developing emerging technology such as machine learning and cloud services,” Tencent Chairman Pony Ma said in the statement filed to the Hong Kong Stock Exchange on Wednesday.
The internet services provider also said it proposes to list Yue Wen Group — its online bookstore with 10 million e-books and 600 million registered readers — in Hong Kong. Fundraising is expected to fetch between $600 million and $800 million.
“We are considering Hong Kong as a likely listing venue,” Tencent’s President and Executive Director Martin Lau said at a news conference in Hong Kong on Wednesday.
Tencent’s share prices in Hong Kong fell 1.57 percent to close at HK$225.2 on Wednesday.
Bloomberg contributed to this story.
Contact the writers at oswald@chinadailyhk.com and evelyn@ chinadailyhk.com
rise in Tencent Holdings Ltd’s revenues in the 2016 fiscal year
Asia’s biggest oil refiner China Petrochemical Corp, known as Sinopec, said on Wednesday it had nailed an agreement to acquire a refinery and key assets of Chevron South Africa and Chevron Botswana for about $900 million.
Sinopec said it has signed a sales and purchase agreement with Chevron Global Energy Inc to acquire its 75 percent stake in Chevron South Africa Proprietary Ltd and its 100 percent holding in Chevron Botswana Proprietary Ltd.
Apart from the refinery, under the deal Sinopec has also bought a retail business and storage terminals from Chevron.
The remaining 25 percent interest of the Chevron South Africa is held by a consortium of Black Economic Empowerment shareholders and an employee trust, according to Chevron spokesman Braden Reddall.
Once approved, it will be Sinopec’s first refinery on the African continent.
An analyst said the acquisition was meant to convert the site i nto a profitable storage terminal, using the energy behemoth’s downstream experience and advantages.
“Chinese oil companies have become more active in chasing refinery assets worldwide as oil majors reshape asset portfolios,” said Li Li, energy research director at ICIS China, a consulting company that provides analysis of China’s energy market.
“Sinopec used to focus mostly on the domestic market, but now it’s interfacing more with the global market, with its ample expertise and experience.”
According to Sinopec, the acquired assets include Chevron’s 100,000 barrels per day capacity Cape Town refinery, its lubricants manufacturing plant in Durban, a network of more than 820 service stations with 220 convenience stores across South Africa and Botswana, and storage tanks and oil depot distribution facilities.
With a growing middle class, demand for refined petroleum in South Africa has been increasing at an average annual rate of nearly 5 percent during the past five years, currently reaching a total of approximately 27 million metric tons, Sinopec said.
The company said it has a proven capability to deliver complex large-scale projects, with its annual capacity of more than 10 million tons of refined products and with an annual ethylene production of more than 1 million tons.
French oil group Total SA and commodity traders Glencore Plc and Gunvor Group were also among those bidding for a 75 percent stake in Chevron’s South African downstream assets.
The agreement has been filed with the Chinese government and remains subject to regulatory approvals in South Africa and Botswana, Sinopec said.
value of Sinopec Group’s latest deal for African assets