Morning Commentary: Convertibles trading quiet early; Li Auto notes add; Pinduoduo up

By Rebecca Melvin

Concord, N.H., June 1 – The convertible bond market started out the holiday-shortened week with quiet trading on Tuesday, as U.S. stocks turned mixed by mid-morning following a firmer open.

U.S. financial markets were closed on Monday in observance of Memorial Day.

Convertibles trading was focused on names with higher underlying shares.

Li Auto Inc.’s 0.25% convertibles due 2028 changed hands higher by nearly 2 points as the common shares rose 3% at $24.00 per share. The convertible was atop the Trace volume chart at mid-morning with a 107.316 print, which was up 1.917 points at 10:15 a.m. ET.

The China electric vehicle maker reported mixed first-quarter earnings last week and guided lower for second-quarter sales, although it forecast record deliveries. The company forecast second-quarter revenue of $609 million to $651.7 million, below estimates for $704.5 million, with deliveries expected to climb to 14,500 vehicles to 15,500 vehicles, which is up 120% to 135% from a year earlier.

Pinduoduo Inc.’s 0% convertible notes due 2025 jumped 2.5 points, according to Trace data. The Pinduoduo ADR’s gained $12.60, or 10%, at $137.48 in the early going after the Shanghai-based e-commerce company reported a first-quarter earnings beat last week.

The company reported a 239% gain in revenue to 22.17 billion yuan for the first quarter and a 49% increase in monthly active users year over year to 724.6 million.

The 0.375% convertible notes due 2024 of Waltham, Mass.-based Repligen Corp. hadn’t yet moved in early trade on Tuesday after shedding 0.9 point on Friday to 166. Shares were down $6.86, or 3.8%, to $175.75 as of late morning.

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