The US Department of Defense (DoD) announced yesterday (6th) that TENCENT (00700.HK) -6.200 (-1.230%) Short selling $1.96B; Ratio 13.546% , CATL (300750.SZ) -6.060 (-2.432%) and SENSETIME-W (00020.HK) +0.020 (+1.307%) Short selling $155.81M; Ratio 18.336% were added to the Section 1260H list, a list of companies that collaborate with China's military. TENCENT's inclusion in the list of Chinese military companies came as a surprise to the market, denting its ADRs and Hong Kong shares, Ivan Su, Senior Equity Analyst at Morningstar, said.Related NewsUBS: CN Firms Record Strong Rev./ Profit Growth in 4Q24; Sustained Trend Expected to Support Stock Mkt RallyHowever, considering that TENCENT's business model revolves around social networking and online game, and that it is not a SOE and is not involved in any major military projects, Su believed that there is a good chance that the Company will be excluded from the list later, similar to what happened to XIAOMI-W (01810.HK) +1.350 (+3.030%) Short selling $2.47B; Ratio 12.173% when it was removed from the list in 2021, just 4 months after its inclusion.Morningstar estimated TENCENT's earnings exposure to the US to be in the high single-digit percentage range, which is mainly attributable to game revenue, and believed that TENCENT's US game business is highly unlikely to be affected in the near term.(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2025-04-03 16:25.) (A Shares quote is delayed for at least 15 mins.)