Tencent, CATL, and others respond to 'Chinese military list' of U.S. Department of Defense

On Jan. 6, the U.S. Department of Defense announced that it has added several Chinese tech giants, including Tencent Holdings and CATL, to its 1260H list. The list also includes chip manufacturer CXMT, Quectel, and Autel Intelligent Tech.

In response, Tencent stated on Jan. 7, asserting that being included in this list is an error. They are not a military enterprise or a military supplier. Unlike export controls or other measures, this list does not impact our business. Nonetheless, they will work with relevant U.S. authorities to resolve this misunderstanding. Reports indicate that CATL also responded, stating that the company has not engaged in any military-related activities. As of the time of publication, Tencent's stock fell nearly 7%.

SenseTime also quickly issued a statement, saying the U.S. Department of Defense has added SenseTime to the Chinese Military Companies List. They believe this action is unfounded, and strongly oppose it. The main impact of this list is that entities on it cannot become suppliers to the U.S. Department of Defense, which does not have substantial effects on our business. SenseTime will actively communicate with all parties to ensure fair treatment and maximize the protection of the company's and shareholders' interests.

Citi released a research report stating that Tencent's inclusion on the U.S. military list does not necessarily imply sufficient evidence. They believe Tencent will cooperate with the U.S. Department of Defense to resolve the misunderstanding, but they expect short-term impacts on Tencent's stock price. However, they suggest that if the fundamentals remain unchanged, any sell-off could present a buying opportunity.

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