BILIBILI-W

$TENCENT(00700.HK)$BILIBILI-W(09626.HK)

🔄 Tencent’s Bilibili Exit: Capital Recycling in Action

Tencent’s near-total divestment from Bilibili is not about a sudden profit windfall, it is a smart capital discipline.

📉 Actually Not a big gain but small losses 😔

The stake is marked to market, so quarterly profit impact is negligible.

Sale price HK$115.38 was below the June valuation (~HK$131.70), leading to an estimated US$84M–US$98M loss ( just ~1% of one quarter’s net profit, immaterial for Tencent ).

🎯 The real strategy: capital recycling

• Converts minority stake into US$393M net cash to fund AI growth, buybacks and dividends.

• Takes US$200M in convertible notes: downside protection, plus upside if Bilibili tops HK$155.79.

• It is a repositioning and not a split. Tencents is still partner with Bilibili but capital goes where it matters most now.

A masterclass in financial agility: prioritizing liquidity and focus over short-term optics. ✅️

Refer to the infographic for more information ☺️☺️

Not financial advice. Do your own DD ☺️.

Yesterday, $Bilibili(BILI.US) and $TENCENT(00700.HK) announced major moves — BILI issued a convertible bond and launched a buyback, while Tencent fully exited its equity stake and subscribed to part of the CB. Dolphin Research walks through the mechanics first, then the impact.

1) Execution: viewed from BILI and Tencent

(1) BILI: net raise of $400mn

BILI is issuing $700mn of CBs in total, with Tencent taking $200mn and the remaining $500mn placed in the market. Concurrently, it conducted an equity placement of ~7mn shares worth $100mn, and will offset the placement via a matching $100mn repurchase and cancellation.

In addition, for the 40mn shares Tencent is selling (~$600mn), BILI will purchase $200mn worth.

Net-net, BILI raises $700mn and spends $100mn (placement hedge) plus $200mn (buying part of Tencent’s block), resulting in a net financing of $400mn.

(2) Tencent: fully exits equity, retains debt plus option-like upside via potential conversion

Before the deal, Tencent held 40.01mn BILI shares, a 9.6% stake (our earlier read on a 6% cut in May was incorrect). Post-transaction, Tencent exits its entire equity position, accepting a ~5% placement discount as the cost.

By subscribing to $200mn of CBs, it effectively keeps a debt position equal to roughly one-third of its prior equity value, with upside optionality via potential conversion.

2) Impact on BILI: near-term choppy, long-term constructive as the Tencent overhang is removed

(1) Tencent’s sale plus concurrent placement will still cause near-term volatility despite the buyback hedge

BILI’s CB carries a zero coupon and a 35% conversion premium vs. the reference price. In today’s high-rate environment, that does not appeal to traditional long-only investors. Hence the concurrent equity placement to help CB buyers establish initial short positions (delta placement).The logic is as follows: typical buyers are arbitrage funds, who go long the CB and short the underlying to hedge single-direction risk. They are not taking a directional view; they seek to monetize volatility.

Borrowable float in BILI is limited and borrow costs are high (China ADR short demand is elevated and dual listings fragment the borrow pool). If multiple CB buyers source borrow simultaneously in the open market, it would push borrow costs even higher.Therefore, the underwriters aggregate borrow supply via a delta placement to lower the borrow cost for CB buyers.

To mitigate the initial short interest’s impact on price moves, BILI executed a matching $100mn repurchase. While this helps offset shorting pressure in aggregate, the process can still introduce near-term swings.Meanwhile, of the Tencent block, BILI is taking $200mn, but another ~$388–400mn (~5%) still needs to be placed by the banks.

(2) Longer term: low-cost funding and removal of non-fundamental pressure

BILI is raising $700mn, and the $300mn of buybacks do not consume the existing authorization. Overall, net proceeds are $400mn.

The CB is zero-coupon with a high conversion premium (US ADS reference around $20, HK at HK$155), more than 40% above yesterday’s close. Near to mid term, equity dilution from the CB alone should be limited.

All in, funding cost is low, and the USD proceeds can be deployed into AI investment or further buybacks.

In the Q2 update, we highlighted the valuation overhang from Tencent’s potential selldown. We had expected Tencent to wait for some recovery before trimming.

In practice, Tencent moved fast (to raise USD for compute and buybacks), choosing to sell at a low price and accept a 5% discount rather than wait for a valuation rebound.

To preserve the strategic relationship (BILI is an effective channel for Tencent’s games and AI applications), Tencent still subscribed to $200mn of CBs. For Tencent, that effectively means receiving ~$400mn of cash.

For BILI, the selldown overhang is removed. Versus Tencent drip-selling or dumping in the open market, this structure is more conducive to share price stability.

3) BILI valuation: back to fundamentals; inflection tied to the new game cycle starting in Q4

Friday’s close implies a $6.37bn mkt cap. On adj. net profit of 3bn/4bn in 2026/27, that is ~14x/11x PE; with a mid-cycle multiple and matched growth, there is room for multiple repair, implying $8bn+ on 18x this year or 15x next year.

Near-term catalysts hinge on Q4 timing for 'Three Kingdoms: Kingship Under Heaven'. 'Shining Lumi' goes live in mid-Sep, but as a lighter casual title its contribution to the new cycle may be limited.

$KUAISHOU-W(01024.HK)$BILIBILI-W(09626.HK)

🚨 Tencent Sold - But Kuaishou & Bilibili Are Fine! Here’s Why

Are Kuaishou and Bilibili in trouble after Tencent trimmed its stakes? The short answer is absolutely not. ✅

The market reacted with short-term anxiety. Their latest earnings tell a very different story.

These divestments are secondary-market transactions. Zero cash changes hands at the company level and founders keep full operational control. 🤝

Why They Remain Strong:

✅ Partnerships Unchanged:

Core collaborations - advertising, cloud, gaming and payments are completely unaffected.

Tencent even recently backed Kuaishou’s AI unit, Kling AI! 🤖

✅ Financially Independent & Solid:

Both are profitable, cash-positive and self-sustaining:

• Kuaishou: Q2 revenue RMB 35.5B, profit RMB 3.1B, liquidity RMB 62.3B 💰

• Bilibili: Liquidity RMB 24.3B, Q1 adjusted profit +62% YoY 📈

Short-term sentiment and share supply may pressure prices but realistically and operationally nothing has changed.

These are mature, self-sustaining businesses.

Don’t let market noise overshadow strong fundamentals! 📊

See the real numbers in the infographic below 👇

Not financial advice. Please do your own DD😉.

Interesting to note that the Singapore Market has been experiencing dips recently after a strong showing for months, but this won't be too surprising given the ifast inflation rise reported on Tuesday. Moreover, banks are also getting a little pricey, so a small pullback is to be expected.

Bilibili 2Q26 First Take: Q2 results were mediocre, broadly in line with expectations. Revenue was again carried by ads, with growth ticking up QoQ on easier comps. On the bottom line, a slight beat came mainly from tighter control of selling expenses.

This year’s key issue is a thin games slate. The high base from 'San Mou' drove a sharp YoY decline in gaming revenue. While the in-house title 'Baijiangpai' launched in Q2, its scale is too small; to move the needle, they need at least a mid-sized breakout.

In H2, the revenue comp base falls quickly, which should naturally ease the trend. Based on the current pipeline, two in-house titles 'Shine, Lumi!' and 'Three Kingdoms: The Way' (many expect both could be bn-level) are slated for Q4 launch. The new-release cycle could revive gaming growth.$Bilibili(BILI.US) $BILIBILI-W(09626.HK)

$BILIBILI-W(09626.HK)$Bilibili(BILI.US)

Bilibili 1H 2026: Ads & AI Shine- Gaming in Transition

Bilibili’s latest results tell a clear story: advertising is driving growth, profits are improving, but gaming is still shifting gears.

📊 The Numbers:

• Revenue: ~RMB 15.4B (+7.5% YoY)

• Adjusted net profit: ~RMB 1.29B, up 39%! ✨

🔥 The Star -Advertising:

Ad revenue jumped ~29% to RMB 5.7B, powered by AI , smarter matching, better conversions, and fresh ad inventory. 🤖

💰 Profits Trending Up:

Q2 gross margin hit 37.2%, with management targeting 40–45% long-term. Moving in the right direction! 📈

⚠️ The Weak Spot , Gaming:

Gaming revenue -13% YoY. The blockbuster Sanmou is maturing, so growth now hinges on new titles: N Card, Sanwang, Lumi Master. 🎮

🤝 Shareholder-Friendly:

US$300M buyback program ,already repurchased ~US$118M worth of shares in 2026.

💡 Bottom Line: Ads + AI + margins are firing. Gaming is the big question for H2.

Full breakdown in the infographic! 👇

Not financial advice. Do your own DD😆

Is this the top for the banks? Just a month or two back, there is nothing but praises for them Now it seems that there are cautiously mildly bearish pieces creeping out from the shadows. Are bank bulls starting to blink now?

Singapore’s manufacturing output rose 6.8% year-on-year in July, beating forecasts, though slower than June’s revised 7.5% gain, per today’s Straits Times. Every sector grew except biomedical manufacturing and chemicals. Electronics growth slowed noticeably, suggesting AI-driven momentum may be easing 😔.

That said, official data shows order books remain solid, with exports and PMI confirming external demand stays robust for now ☺️