To The Moon

I think it would be the best strategy to sell at least half and keep half of Tencent $TENCENT(00700)$ now. Tencent is definitely not the company with the biggest upside potential, but it must be one of the few companies with the best certainty and stability. Buying Tencent is buying certainty and stability. For those whose expected rate of return is not particularly high, such as within 10%, Tencent is a stock worth holding for a long time. Of course, the current price of Tencent, which is 364 yuan, has nearly doubled the initial increase compared to the beginning of November last year. Reducing the holdings by half can make the cost price lower, or even zero cost, so that you can hold it with more peace of mind, and you can also have Opportunity to absorb again at a relatively low price. If you hold Tencent, we should pay attention to the following points. 1) Will the share capital increase due to option exercise? Tencent rewards excellent employees with options, but options have costs, and employees need to pay the cost to Tencent according to the exercise price when exercising the options. The share capital is not increased when the option is granted, and the share capital is only increased when the option is exercised. 2) Restricted shares are awarded to in-service employees free of charge, and will generally be issued to the total share capital within one or two months after granting. Generally, the unlocking period is four years, and there are certain unlocking conditions. 3) In 2022, Tencent will repurchase a total of 107.08 million shares at a total cost of 33.8 billion Hong Kong dollars, with an average return unit price of 316 Hong Kong dollars.

Among them, 100.64 million shares have been canceled in 2022, and 6.64 million shares will be canceled in 2023. The total share capital reduction caused by repurchase is 100.64 million shares. 4) Tencent had a total share capital of 8.718 billion shares at the beginning of its listing in 2004. During 2019, the exercise of options increased by 888 million shares, the award of restricted shares increased by 397 million shares, and the share repurchase and cancellation of shares decreased by 434 million shares. The annual share capital increase ratio is 9.75%. At present, Tencent’s total share capital is 9.569 billion shares, which has almost returned to the scale at the end of 2019. It is expected that Tencent's total share capital will decrease this year, but as Tencent's share price rebounds, the scale of repurchases this year may be much lower than last year, and it is expected that the share capital will not decrease too much. 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 be repurchased when the stock price is low Write off more equity, thereby increasing everyone's earnings per share and shareholding ratio. This may be the most powerful reason to hold Tencent

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