Asian convertible issuers in focus; Bilibili, ZTO, Li Auto, Pinduoduo notes gain

By Abigail W. Adams

Portland, Me., Nov. 29 – The convertibles primary market remained dormant on Tuesday with the burst of activity expected before the year draws to a close not yet materializing.

However, there was an uptick of activity in the secondary space with topical news and end-of-month cleanup sparking activity in certain names.

Equity indexes closed Tuesday mixed after wobbling between positive and negative territory throughout the session.

The Dow Jones industrial average closed Tuesday up 3 points, or 0.01%, the S&P 500 index closed down 0.16%, the Nasdaq Composite index closed down 0.59% and the Russell 2000 index closed up 0.31%.

There was $97 million in reported volume about one hour into the session and $521 million on the tape about one hour before the market close.

Asian names were in focus with the convertible notes of several China-domiciled companies making strong gains following Monday’s sell-off, which was sparked by domestic unrest in China.

Bilibili Inc.’s 0.5% convertible notes due 2026 were in focus with the notes rising outright as its equity shot up double digits.

Pinduoduo Inc.’s 0% convertible notes due 2025 continued their upward momentum with the notes continuing to gain on an outright and dollar-neutral basis following Monday’s large earnings beat.

ZTO Express’ 1.5% convertible notes due 2027 and Li Auto Inc.’s 0.25% convertible notes due 2028 also made large gains in heavy volume.

Bilibili’s earnings

Bilibili’s 0.5% convertible notes due 2026 were in focus on Tuesday with the notes rising outright as its equity surged double digits following a large earnings beat.

The 0.5% notes jumped 4 points outright with equity up more than 20%.

The notes were changing hands at 61.5 versus an equity price of $15.40 in the late afternoon, according to a market source.

The yield on the notes was 26.5%.

There was $16 million in reported volume.

While the notes gained outright, there was little movement in the high-premium name on the move up, a source said.

The Shanghai-based video sharing website’s American Depositary Shares traded to a low of $14.27 and a high of $15.73 before closing the day at $15.40, an increase of 22.32%.

Bilibili became the latest China-domiciled company to post a surprise earnings beat with the company reporting losses per share of 62 cents versus analyst expectations for losses per share of 65 cents.

Revenue was $808.8 million versus analyst expectations for revenue of $801 million.

Pinduoduo’s earnings

Pinduoduo’s 0% convertible notes due 2025 continued their upward momentum on Tuesday with the notes continuing to add on an outright and dollar-neutral basis following a strong earnings report.

The Shanghai-based e-commerce company’s 0% convertible notes due 2025 rose 3 points outright.

The notes were changing hands at 93.875 versus a stock price of $78.65 in the late afternoon.

The yield on the notes dropped to 6.41%.

The notes expanded about 1 point dollar-neutral on the move, a source said.

There was $9 million in reported volume.

Pinduoduo’s ADSs traded to a low of $76.46 and a high of $80 before closing the day at $78.43, an increase of 5.91%.

While the ADS space was under pressure on Monday, Pinduoduo bucked the trend with its equity surging since reporting earnings prior to the market open on Monday.

Pinduoduo’s equity has climbed more than 20% over the past two sessions.

Rebound

Li Auto’s 0.5% convertible notes due 2028 and ZTO’s 1.5% convertible notes due 2027 were on the rise in active trade as the ADS space recovered from Monday’s sell-off.

ZTO’s 1.5% convertible notes due 2027 gained 2 points outright with its equity up a little more than 2%.

The notes were changing hands at 99.75 in the late afternoon.

There was $14 million in reported volume.

ZTO’s ADSs traded to a low of $23.84 and a high of $24.22 before closing the day at $24.05, an increase of 2.23%.

Li Auto’s 0.25% convertible notes due 2028 rose more than 3 points outright with equity up more than 8%.

The 0.25% notes were seen at 94.875 versus a stock price of $18.43 in the late afternoon.

There was $11 million in reported volume.

Li’s ADSs traded to a low of $17.80 and a high of $18.84 before closing the day at $18.53, an increase of 8.74%.

Mentioned in this article:

Bilibili Inc. Nasdaq: BILI

Li Auto Inc. Nasdaq: LI

Pinduoduo Inc. Nasdaq: PDD

ZTO Express NYSE: ZTO

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