To The Moon

Let's briefly talk about the process of holding Tencent in the past two years: when Tencent$TENCENT(00700)$  fell below 500 Hong Kong dollars in 2021, I cleared all Xiaomi$XIAOMI-W(01810)$ in my hands about 25 Hong Kong dollars and then bought Tencent. In the following years, Tencent was basically in a state of decline. I fell all the way. The last increase in positions was 200 yuan. At present, the cost price has been reduced to about 350. At present, the book is profitable. In addition, JD.com and Meituan shares are distributed. Although Tencent has been falling in the past two years, the overall shareholding experience is still very good.

Tencent must not be the company with the largest room for growth, but it must be one of the few companies with the best certainty and stability. Buying Tencent is to buy certainty and stability. For people whose expected yield is not particularly high, such as less than 10%, Tencent is a stock worth holding for a long time. Of course, if your expected rate of return is very high, such as more than 20%, Tencent is definitely not suitable for you.

End the nonsense. Let's take a look at the changes in Tencent's equity in 2022. Welcome to follow, share and like.

1. Increase in equity caused by the exercise of options:

Note: Options have a cost, and employees need to pay the cost to Tencent at the exercise price. The equity will not be increased when the option is granted, and the equity will only be increased when the option is granted.

In 2022, Tencent employees (including former employees) exercised a total of 68.1 million shares of options, thus increasing the equity by 6.81 million shares. The average exercise price was 165 Hong Kong dollars, resulting in 1.124 billion Hong Kong dollars in cash.

As of January 5, Tencent currently has about 120 million unenabled options.

2. Increase in equity caused by restrictive share rewards:

Note: Restricted shares are rewarded to employees free of charge. Generally, they will be issued to the total share capital a month or two after the grant. Generally, there is a four-year unlocking period with certain unlocking conditions.

In 2022, Tencent awarded employees a total of 54.2 million restricted shares in 6 batches. As of January 5, Tencent currently has 124 million restricted shares that have been issued but do not belong to employees.

3. Reduced share capital caused by repurchase:

In 2022, Tencent recovered 10.08 million shares, with a total cost of 13.8 billion Hong Kong dollars and an average return unit price of HK$316.

Of these, 10.64 million shares were written off in 2022, and 6.64 million shares will be written off in 2023, resulting in a total reduction of 10.64 million shares through repurchase.

4. Changes in total equity:

At the beginning of 2022, Tencent's total share capital was 96.08 billion shares. In 2022, option rights increased by 6.81 million shares, restricted share rewards increased by 54.2 million shares, and repurchase cancellation decreased by 10.64 million shares. The total share capital of the above three items decreased by 39.64 million, and Tencent's total share capital was 9.596 billion shares by the end of 2022.

5. Changes in Tencent's equity over the years:

Tencent's total share capital at the beginning of its listing in 2004 was 8.318 billion shares. In the past 19 years, the exercise of options increased by 888 million shares, the restricted share reward increased by 397 million shares, and the share repurchase cancellation decreased by 434 million shares. After listing, the cumulative increase of 850 million shares, 19 The increase in equity during the year was 9.75%.

At present, Tencent has a total share capital of 9.556 billion shares, almost returning to the scale at the end of 2019. Tencent's total share capital is expected to decrease this year, but with the rebound of Tencent's stock price, the scale of this year's repurchase may be much lower than that of last year, and it is expected that the share capital will not decrease much.

Repurchase is essentially not much different from dividends, and there is no tax, which is a good means for listed companies to repay shareholders. Tencent repurchased 33.8 billion Hong Kong dollars last year, calculated as a total share capital of 9.556 billion yuan. If you have always held Tencent last year, it is equivalent to a dividend of 3.53 Hong Kong dollars per share, that is, holding 10,000 shares, which is equivalent to 35,300 Hong Kong dollars. If Tencent still repurchas 350 million Hong Kong dollars every day this year, you hold 10,000 shares, which means that you can get a return of HK$366 per day.

Therefore, for investors who plan to hold Tencent for a long time, Tencent's continuous repurchase, especially when the stock price is low, is very beneficial to investors, because the same funds can repurchase and cancel more equity when the stock price is low, so as to improve everyone's earnings and shareholding ratio.

I hope Tencent's future repurchase can continue.

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