In major news on Hong Kong Stocks, Trip.com Group Limited (HK:9961) announced the issuance of $1.3 billion of convertible bonds, targeting debt reduction and securing funds for global expansion and working capital needs. Trip.com shares are down by 1.57% as of writing.
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Trip.com Group is a leading travel agency that offers services like hotel bookings, air tickets, and holiday packages.
Details About Trip.com’s Notes Issue
Trip.com’s convertible senior notes will provide an interest rate of 0.75% per year, which will be paid twice on June 15 and December 15, starting on December 15, 2024. The notes will mature on June 15, 2029, unless repurchased, redeemed, or converted according to their terms before that date.
Furthermore, to offset any dilution effect for ordinary shareholders, the company intends to repurchase up to $300 million worth of ADS (American depositary shares) at $50.16 per ADS. This reflects the last reported sale price per ADS on the Nasdaq as of June 4, 2024.
Expanding Convertible Bond Market in Hong Kong
The bond offering by Trip.com reflects the expanding convertible bond market in Hong Kong to raise funding. With this offering, Trip.com will join companies like Alibaba Group (HK:9988) and JD.com (HK:9618), which have utilized the convertible bond market to raise funds for share repurchases or reducing debt.
Last month, Alibaba announced plans to issue convertible notes for $5 billion to sponsor its share buybacks. Similarly, JD.com also offered $2 billion in convertible senior notes due in 2029.
Is Trip.com Stock a Buy?
Following the announcement, Citigroup analyst Brian Gong suggested that there might be some short-term volatility in Trip.com’s share price, as investors could opt to book profits.
Overall, as per the consensus among analysts on TipRanks, 9961 stock has a Strong Buy rating based on four Buy recommendations. The trip.com share price target is HK$562.25, which implies an upside of 37.7% from the current price level.
