HK Stock Market Move | BILIBILI-W (09626) opened nearly 3% higher and plans to issue $700 million convertible senior notes, which could immediately relieve the selling pressure from Tencents shareholding.

BILIBILI-W (09626) opened nearly 3% higher and, as of the time of writing, was up 2.74%, trading at HKD 127.4, with a transaction volume of HKD 6.0464 million. In recent news, BILIBILI-W announced that the company plans to issue USD 700 million in exchangeable senior bonds maturing in 2031; the issuance includes a USD 200 million allocation for Tencent (through its subsidiaries) subscribing to the bonds on the same terms as other investors. The announcement stated that, in addition to using part of the proceeds from the bond issuance for the repurchase funds, the company plans to use the remaining proceeds for AI-driven business growth. Daiwa released a research report stating that BILIBILI-W will issue USD 700 million in zero-coupon convertible bonds maturing in 2031, while Tencent (00700) has completed the sale of its entire stake of approximately 9.6%. The firm holds a positive view on this "win-win-win" innovative structure, believing that it alleviates Tencents long-standing cash-out pressure, brings approximately USD 400 million in new capital to Bilibili, and restricts equity dilution through an immediate USD 300 million share repurchase and cancellation. Daiwa believes that the benefits of this transaction outweigh the drawbacks, as it can immediately eliminate the sell pressure on Tencent's shares and raise long-term zero-coupon funding at a cost much lower than ordinary offshore debt.