Log in
Forgot password ?
Become a member for free
Sign up
Sign up
Dynamic quotes 

4-Traders Homepage  >  Equities  >  Stock Exchange of Hong Kong  >  Tencent Holdings Ltd    0700   KYG875721634

Mes dernières consult.
Most popular
News SummaryMost relevantAll newsSector newsTweets

Tencent : Joins Asia-Tech Debt Rush With Its Biggest Bond Sale

share with twitter share with LinkedIn share with facebook
share via e-mail
01/12/2018 | 08:56am CET
By Manju Dalal 

Chinese internet giant Tencent Holdings Ltd.'s visit to the bond market this week marked the latest in a string of Asian technology firms that have been issuing more debt as their market values have swelled.

Tencent, which owns the popular messaging service WeChat and is one of the world's largest videogame publishers, on Thursday priced $5 billion in U.S.-dollar bonds that mature in five, 10 and 20 years--its largest-ever bond sale.

The Shenzhen-based company last issued bonds about three years ago. At that time, it priced its 10-year bonds at 2.05 percentage point above U.S. Treasury yields, or 3.8%. This time it paid lower rates to borrow: Its 10-year bonds were priced at 1.05 percentage point above U.S. Treasury yields, or 3.595%.

Strong investor demand also allowed Tencent to price its 20-year bonds to yield under 4% a year, locking in low long-term interest rates. The offering also included five-year floating rate notes that were priced at 0.6 percentage point above the three-month London interbank offered rate, according to a banker on the deal. That Libor benchmark was recently 1.7%.

Tencent's debt sale came about a month after Chinese e-commerce behemoth Alibaba Group Holding Ltd. issued $7 billion in bonds with maturities ranging from 5.5 to 40 years. Other Asian tech issuers in the last year included Baidu Inc. and Lenovo Group Ltd., according to data provider Dealogic.

Together, the bond offerings reflect the growing significance of corporate bond issuers in Asia, particularly from China. Chinese tech companies issued $12.1 billion in dollar bonds in 2017, more than four times as much as the year before, according to Dealogic. Outside of the banking sector, only real-estate companies and so-called holding companies--often known as conglomerates--issued more debt from China.

Chinese real-estate companies issued $27 billion in bonds last year, nearly three times as much as a year ago, while conglomerates raised about $13 billion, nearly 2.5 times their 2016 fundraising. Overall, Chinese companies raised $118 billion in bonds last year.

In the past few years, Asian tech companies have seen a meteoric rise in their market capitalization. At the same time, their debt levels have remained relatively low, giving them room to raise more funds from the bond markets. Shares of Tencent and Alibaba roughly doubled last year.

In doing so, Chinese tech firms are following the lead of Apple Inc., the world's largest tech company by market value, which has issued billions of dollars worth of bonds in recent years despite having a sizable cash balance.

"These companies seem to be taking advantage of the strong (bond) markets at the moment," said Luther Chai, a research analyst from CreditSights in Singapore.

Bond markets have been on a tear in the past year as investors have rushed to buy debt issued by companies, particularly those in Asia. Thanks to this strong demand, the cost of borrowing money using bonds is now around its lowest in many years.

Like its Asian peers, Tencent is likely to use the funds raised to partially repay its existing debt and for future acquisitions. The company has $3 billion of debt maturing during the first three quarters of 2018, Mr. Chai noted in a research note earlier this week. Tencent already owns stakes in prominent overseas companies including Snap Inc., Tesla Inc. and Spotify AB.

As with Alibaba's offering, Tencent's bond offering received a positive response from investors in the U.S. who placed nearly half of the roughly $42 billion in orders for the deal, according to a person familiar with the matter.

Tencent's bonds are expected to be rated A2 by Moody's, a notch below those of Alibaba.

The bond offering followed two days of meetings with investors in Asia, Europe and the U.S. via 14 banks including Deutsche Bank AG, Bank of America Merrill Lynch and HSBC Holdings PLC.

Write to Manju Dalal at [email protected]

share with twitter share with LinkedIn share with facebook
share via e-mail
03:46a Riding a ‘once-in-a-lifetime’ boom
03:02a Riding a ‘once-in-a-lifetime’ boom
01/19 Digital economy offers exciting prospects
01/19 Tencent, Google sign long-term patent cross-licensing agreement
01/19 TENCENT : Digital economy offers exciting prospects
01/19 Tencent, Google sign long-term patent cross-licensing agreement
01/19 HSI opens up 20 pts to 32,142; H-share up 30 pts at 13,125
01/19 TENCENT : Google and China's Tencent Find Being Friends Has Benefits
01/19 Winter sports industry turning cold into gold
More news
News from SeekingAlpha
01/19 WALL STREET BREAKFAST : Investors Calm As Government Shutdown Looms
01/19 China push? Google announces deal with Tencent
01/18 Game-Changer For Tencent In Tie-Up With Lego
01/17 How My Portfolio Of 7 Stocks Beat The Market
01/16 WALL STREET BREAKFAST : More Records In Store For Equities
Financials ( CNY)
Sales 2017 241 B
EBIT 2017 79 696 M
Net income 2017 64 954 M
Finance 2017 60 911 M
Yield 2017 0,20%
P/E ratio 2017 53,54
P/E ratio 2018 42,44
EV / Sales 2017 14,3x
EV / Sales 2018 10,0x
Capitalization 3 500 B
Duration : Period :
Tencent Holdings Ltd Technical Analysis Chart | 0700 | KYG875721634 | 4-Traders
Technical analysis trends TENCENT HOLDINGS LTD
Short TermMid-TermLong Term
Income Statement Evolution
Mean consensus OUTPERFORM
Number of Analysts 38
Average target price 394  CNY
Spread / Average Target 7,2%
EPS Revisions
Hua Teng Ma Chairman & Chief Executive Officer
Chi Ping Lau President & Executive Director
Yu Xin Ren COO & President-Interactive Entertainment Group
Shek Hon Lo Chief Financial Officer & Senior Vice President
Zhi Dong Zhang Chief Technology Officer
Sector and Competitors
1st jan.Capitalization (M$)
NETFLIX13.30%95 344
WEIBO CORP (ADR)24.88%28 340
58.COM INC (ADR)13.64%11 738