Bank of China International: Bilibili-W (09626) Very Constructive Trading Combination Eliminates Pressure on Tencent (00700) to Reduce Holdings and Maintains “Buy” Rating

The Zhitong Finance App learned that Bank of China International released a research report stating that while maintaining the Bilibili W (09626) “buy” rating, the target price for H shares remained unchanged at HK$224. The bank pointed out that Bilibili announced a series of deals after closing last Friday (September 4), once and for all, removing all pressure on Tencent (00700) to reduce its holdings, and through the proposed issuance of a total of 700 million US dollars, zero-interest convertible bonds due in 2031, a share price premium of about 35%, with optional redemption rights in 2029. At the same time, a total of 300 million US dollars was cancelled in batches through two methods to raise about 400 million US dollars in net capital.

The bank believes that this is a highly constructive and tailored plan for Bilibili, which effectively mitigates the impact of the proposed issuance of 700 million US dollars of convertible bonds and the simultaneous one-time reduction of Tencent's large holdings on stock prices. At the same time, Tencent's $200 million convertible bond subscription also shows confidence in Bilibili's long-term upward potential. Bank of China International is optimistic that Bilibili will achieve strong and sustainable profit growth, contributed by its healthy “3C” flywheel, and is being further amplified by focused and restrained AI implementation.