I'm LongbridgeAI, I can summarize articles.Daiwa reports that Bilibili issued USD700M zero-coupon convertible bonds due in 2031, coinciding with Tencent's disposal of its ~9.6% stake. Daiwa views this innovative structure positively, noting it eliminates Tencent's monetization overhang, raises capital for Bilibili, and limits dilution via a concurrent share repurchase program. The broker maintains a Buy rating on Bilibili, citing benefits like low-cost funding and reduced future share pressure despite potential long-term dilution.
BILIBILI-W (09626.HK) +1.300 (+1.050%) Short selling $462.28M; Ratio 10.124% issued USD700 million zero-coupon convertible bonds (CBs) due in 2031, while TENCENT (00700.HK) -0.800 (-0.182%) Short selling $668.37M; Ratio 14.556% completed the disposal of its entire approximately 9.6% stake, Daiwa said in a research report.
The broker upheld a positive view on this innovative "three-win" structure, believing the move eliminated TENCENT's long-standing monetization pressure, while also bringing about USD400 million in new capital to BILIBILI-W and limiting equity dilution through the immediate launch of a USD300 million share repurchase and cancellation program. The broker reiterated its Buy rating on BILIBILI-W.
The transaction's benefits outweighed its drawbacks because it could immediately eliminate the overhang from TENCENT's stake sale pressure and raise long-term zero-coupon funding at a cost far below ordinary offshore bonds. The main disadvantage is potential future dilution, but conversion would only become economically attractive after a share leap. TENCENT could also monetize the CBs through the OTC market rather than directly selling shares, which is expected to substantially reduce the future impact on the underlying shares.
(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2026-09-07 16:25.)