Tencent Holdings Limited (TCEHY) SC 13DWaterdrop / Tencent ownership change

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934

(Amendment No.    )*

Waterdrop Inc.

(Name of Issuer)

Class A Ordinary Shares, par value $0.000005 per share

(Title of Class of Securities)

94132V105**

(CUSIP Number)

Tencent Holdings Limited

Level 29, Three Pacific Place,

No. 1 Queen’s Road East, Wanchai, Hong Kong

Telephone: +852 3148 5100

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

May 6, 2021

(Date of Event Which Requires Filing of This Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), Rule 13d-1(f) or Rule 13d-1(g), check the following box.  ☐

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7(b) for other parties to whom copies are to be sent.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

This Schedule 13D relates to the Class A Ordinary Shares of Waterdrop Inc. (“Class A Ordinary Shares”), an exempted company incorporated under the laws of the Cayman Islands (the “Issuer”), whose principal executive offices are located at Block C, Wangjing Science and Technology Park, No. 2 Lize Zhonger Road, Chaoyang District, Beijing, People’s Republic of China.

(a) This Schedule 13D is being filed jointly by:

(b) The principal business address of each of the Reporting Persons is Level 29, Three Pacific Place, No. 1 Queen’s Road East, Wanchai, Hong Kong.

(c) Tencent is an integrated Internet services company providing services including value-added services, online advertising and FinTech and business services. It has been listed on the main board of the Hong Kong Stock Exchange since June 16, 2004 (SEHK 700). Image Frame and Tencent Mobility are wholly owned subsidiaries of Tencent and are principally engaged in the business of holding securities in portfolio companies in which Tencent invests.

Attached hereto as Schedule A, and incorporated herein by reference, is information concerning each director and executive officer of each Reporting Person (collectively, the “Related Persons”), which is required to be disclosed in response to Item 2 and General Instruction C to Schedule 13D.

(d)-(e) During the last five years, none of the Reporting Persons nor, to the best of the Reporting Persons’ knowledge, any of the Related Persons, has been convicted in a criminal proceeding (excluding traffic violations and similar misdemeanors) or been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree, or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

Prior to the Issuer’s initial public offering on May 7, 2021 (the “IPO”), Tencent beneficially owned an aggregate of 805,085,007 preferred shares, consisting of 30,144,000 series pre-A preferred shares, 110,526,000 series A preferred shares, 12,056,000 series A+ preferred shares, 121,449,070 series B preferred shares, 63,271,334 series C preferred shares, 170,632,018 series C+ preferred shares and 297,006,585 series D preferred shares of the Issuer through Image Frame, for an aggregate purchase price of US$249.6 million. Immediately prior to the completion of the IPO on May 11, 2021, these preferred shares were automatically converted into and re-designated as Class A Ordinary Shares on a one-to-one basis.

Upon completion of the IPO, Tencent subscribed for and acquired an aggregate of 2,500,000 American depositary shares of the Issuer (“ADSs”), representing 25,000,000 Class A Ordinary Shares, through Tencent Mobility, for an aggregate purchase price of US$30 million.

Image Frame and Tencent Mobility obtained its funds from Tencent, their parent holding company, to purchase the abovementioned securities of the Issuer. Tencent used working capital to fund the contributions to Image Frame and Tencent Mobility.

IPO

On May 11, 2021, the Issuer completed the IPO in which Tencent acquired 2,500,000 ADSs, representing 25,000,000 Class A Ordinary Shares, through Tencent Mobility for an aggregate purchase price of US$30 million.

Shareholders Agreement

Pursuant to the fifth amended and restated shareholders agreement (the “Shareholders Agreement”) dated November 20, 2020, Tencent shall be entitled to designate, at any time or from time to time and without the need for any consent or resolution of any other shareholder of the Issuer as long as Tencent holds not less than five percent (5%) of the total number of issued and outstanding shares of the Issuer pursuant to the Shareholders Agreement, one director on the Issuer’s board of directors. This right was terminated upon the IPO. As of the date of this Schedule 13D, Tencent has designated one director on the Issuer’s board of directors.

Pursuant to the Shareholders Agreement, the Issuer has granted certain demand registration rights, shelf registration rights and piggyback registration rights to the shareholders named therein, including Tencent.

The foregoing descriptions of the Shareholders Agreement do not purport to be complete and are qualified in their entirety by reference to the full text of such agreements filed as exhibits to this Schedule 13D, and incorporated herein by reference.

General

The Reporting Persons acquired the securities described in this Schedule 13D for investment purposes and they intend to review their investments in the Issuer on a continuing basis. Any actions the Reporting Persons might undertake may be made at any time and from time to time without prior notice and will be dependent upon the Reporting Persons’ review of numerous factors, including, but not limited to: an ongoing evaluation of the Issuer’s business, financial condition, operations and prospects; price levels of the Issuer’s securities; general market, industry and economic conditions; the relative attractiveness of alternative business and investment opportunities; and other future developments.

The Reporting Persons may acquire additional securities of the Issuer, or retain or sell all or a portion of the securities then held, in the open market or in privately negotiated transactions. In addition, the Reporting Persons and any of their designees to the Issuer’s board of directors may engage in discussions with management, the board of directors of the Issuer, and shareholders of the Issuer and other relevant parties or encourage, cause or seek to cause the Issuer or such persons to consider or explore extraordinary corporate transactions, such as a merger, reorganization or take-private transaction that could result in the de-listing or de-registration of the Class A Ordinary Shares or ADSs; sales or acquisitions of assets or businesses; changes to the capitalization or dividend policy of the Issuer; or other material changes to the Issuer’s business or corporate structure, including changes in management or the composition of the board of directors of the Issuer.

Other than as described above, the Reporting Persons do not currently have any plans or proposals that relate to, or would result in, any of the matters listed in Items 4(a)–(j) of Schedule 13D, although, depending on the factors discussed herein, the Reporting Persons may change their purpose or formulate different plans or proposals with respect thereto at any time.

(a) – (b)

Items 7 through 11 and 13 of each of the cover page of this Schedule 13D for the Reporting Persons are incorporated herein by reference.

As of the date hereof:

Image Frame may be deemed to be the beneficial owner, and deemed to have the sole power to vote or to direct the vote, and sole power to dispose or to direct the disposition, of 805,085,007 Class A Ordinary Shares held of record by Image Frame, representing 25.6% of the total issued and outstanding Class A Ordinary Shares;

Tencent Mobility may be deemed to be the beneficial owner, and deemed to have the sole power to vote or to direct the vote, and sole power to dispose or to direct the disposition, of 25,000,000 Class A Ordinary Shares held of record by Tencent Mobility, representing 0.8% of the total issued and outstanding Class A Ordinary Shares; and

Tencent is the parent company of Image Frame and Tencent Mobility. Tencent may be deemed to beneficially own, and deemed to have the sole power to vote or to direct the vote, and the sole power to dispose or to direct the disposition, of an aggregate of 830,085,007 Class A Ordinary Shares held of record by Image Frame and Tencent Mobility, representing 26.4% of the total issued and outstanding Class A Ordinary Shares.

The beneficial ownership percentage above is calculated based on the total Class A Ordinary Shares issued and outstanding immediately after the IPO publicly disclosed in the IPO prospectus of the Issuer dated May 6, 2021 filed with the United States Securities and Exchange Commission by the Issuer on May 7, 2021.

Holders of Class A Ordinary Shares and Class B Ordinary Shares have the same rights except for voting and conversion rights. Each Class A Ordinary Share is entitled to one vote, and each Class B Ordinary Share is entitled to ten votes and is convertible into one Class A Ordinary Share at any time by the holder thereof. Class A Ordinary Shares are not convertible into Class B Ordinary Shares under any circumstances.

To the knowledge of the Reporting Persons, none of the Related Persons beneficially owns any Class A Ordinary Shares.

(c) Except as described in Item 4, during the past 60 days, none of the Reporting Persons or to the best knowledge of the Reporting Persons, the Related Persons has effected any transactions in the Class A Ordinary Shares.

(d) Except as set forth in this Schedule 13D, no other person is known to have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the Class A Ordinary Shares beneficially owned by the Reporting Persons.

(e) Not applicable.

Item 4 above summarizes certain provisions of the Shareholders Agreement and is incorporated herein by reference. A copy of this document is attached as an exhibit to this Schedule 13D and incorporated herein by reference.

Except as set forth herein, none of the Reporting Persons or Related Persons has any contracts, arrangements, understandings or relationships (legal or otherwise) with any person with respect to any securities of the Issuer, including but not limited to any contracts, arrangements, understandings or relationships concerning the transfer or voting of such securities, finder’s fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or losses, or the giving or withholding of proxies.

SIGNATURES

After reasonable inquiry and to the best of each of the undersigned’s knowledge and belief, each of the undersigned certify that the information set forth in this statement is true, complete and correct.

Date: May 17, 2021

[Signature Page to Schedule 13D—Waterdrop Inc.]

SCHEDULE A

EXECUTIVE OFFICERS AND DIRECTORS

Directors and Executive Officers of Tencent Holdings Limited

The names of the directors and the names and titles of the executive officers of Tencent Holdings Limited and their principal occupations are set forth below. The business address of each of the directors or executive officers is Level 29, Three Pacific Place, No. 1 Queen’s Road East, Wanchai, Hong Kong. Unless otherwise indicated, each occupation set forth opposite an individual’s name refers to Tencent Holdings Limited.

Directors and Executive Officers of Image Frame Investment (HK) Limited

The names of the directors and the names and titles of the executive officers of Image Frame Investment (HK) Limited and their principal occupations are set forth below. The business address of each of the directors or executive officers is c/o Tencent Holdings Limited, Level 29, Three Pacific Place, No. 1 Queen’s Road East, Wanchai, Hong Kong. Unless otherwise indicated, each occupation set forth opposite an individual’s name refers to Image Frame Investment (HK) Limited.

Directors and Executive Officers of Tencent Mobility Limited

The names of the directors and the names and titles of the executive officers of Tencent Mobility Limited and their principal occupations are set forth below. The business address of each of the directors or executive officers is c/o Tencent Holdings Limited, Level 29, Three Pacific Place, No. 1 Queen’s Road East, Wanchai, Hong Kong. Unless otherwise indicated, each occupation set forth opposite an individual’s name refers to Tencent Mobility Limited.