Tencent makes minority stake investment in Indonesia’s MD Pictures

FILE PHOTO: A Tencent logo is seen in Beijing, China September 4, 2020. REUTERS/Tingshu Wang/File Photo

Chinese internet giant Tencent Holdings has made a minority stake investment in Indonesian film production company MD Pictures, according to the latter’s filing with the Indonesia Stock Exchange.

MD Pictures has sold a stake under 15% to Tencent for around $50 million, president director Manoj Dhamoo Punjabi told DealStreetAsia. 

Following the deal announcement, MD Pictures shares were trading around Rp440 apiece, up 2.33% in the second trading session. Its share price has gained more than 125% so far this year.

On the Tencent investment, Punjabi said, “this is a stepping stone for a digital roadmap spanning digital platforms to direct-to-consumer opportunities. It is also a step to grow globally.”

Tencent, Punjabi further noted, has a movie division that has invested in the production and distribution of major Hollywood flicks. “Having a shareholder with a global clout could definitely benefit us,” he added.

The company, which has been in the space for nearly two decades, has made movies such as the biopic Habibie & Ainun, Ayat-ayat Cinta, and horror movies such as Danur and Asih. It has forged partnerships with various digital platforms such as Disney+Hotstar, WeTV, iflix, Viu, Netflix, Vidio, and Telkomsel’s Mastream to distribute films.

Punjabi also made a series of sales and purchase shares prior to the deal announcement. According to an IDX filing, he sold 1.39 billion shares worth Rp695.47 billion ($49 million) on Oct 15, diluting his ownership to 8.86% from 23.48% previously. Before selling his shares in October, Punjabi bought a total of 799.46 million shares through several transactions in September.

PT MD Global Media and PT MD Graha Utama remain the controlling stakeholders in MD Pictures with a combined 50.5% stake in the company.

MD Pictures reported Rp35.98 billion profit in the first six months of 2021 on the back of its initiative to enter streaming service, a significant swing from Rp33.63 billion loss a year earlier. The company’s sales doubled to Rp126.4 billion in January-June 2021 from Rp56.8 billion a year earlier, thanks to film sales.

After getting listed in 2018, MD Pictures has been looking to induct foreign partners as strategic investors in a bid to create greater value for the company.

Tencent has declined to comment on this story.

Tencent in Indonesia

The transaction is seen as Tencent’s entry into the Indonesian entertainment industry. The Chinese internet major, an active investor in the Indonesian tech space, has backed prominent startups including Gojek and GoTo, B2B e-commerce Ula, OnlinePajak, Bibit.id, among others.

Tencen has, through its e-commerce unit JD.com, also invested in Traveloka. Furthermore, it has rolled out messaging app WeChat in Indonesia in partnership with MNC Group. Tencent also has its data centre business in Jakarta through its subsidiary Tencent Cloud. The company plans to open its second data centre in Indonesia by the end of 2021.

Tencent made a major investment in the Southeast Asia media and entertainment space by acquiring streaming platform iflix’s assets in 2020.

Singapore Reporter/s

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Following vacancies can be applied for (only in Singapore).   

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.