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Investing.com -- Moody’s Ratings has assigned an A1 senior unsecured rating to Tencent Holdings Limited’s proposed CNY medium-term notes, which will be drawn under its $30 billion global MTN program.
The proceeds from the issuance will be used for general corporate purposes, according to Moody’s Monday announcement.
"The proposed issuance will strengthen Tencent’s already strong liquidity position, enhance its financial flexibility, and support its continuous growth in revenue and cash flow generation," said Ying Wang, a Moody’s Ratings Vice President and Senior Analyst.
Wang added that the company is expected to maintain its strong credit profile as it expands, driven by prudent financial planning and enhanced operating efficiency through advanced technologies adoption. The issuance will have minimal impact on Tencent’s low leverage, which remains appropriate for its A1 rating.
Tencent’s A1 issuer rating reflects its leading position in value-added services including online games, communication, social, digital content, and mobile payment services in China. The rating also acknowledges Tencent’s large customer base and platforms for monetizing services, contributing to stable cash flow.
The company’s total revenue increased by 14% in the first half of 2025 compared to the previous year. Monthly active users on Weixin and WeChat platforms reached 1.41 billion as of June 2025, up from 1.37 billion a year earlier.
Tencent’s adjusted EBITDA margin expanded to 46% for the twelve months ending June 2025 and for full-year 2024, improving from less than 40% in previous years. This profitability improvement resulted from enhanced efficiency and greater contribution from higher-margin products.
Moody’s expects Tencent to continue delivering approximately 10% annual revenue growth while maintaining its improved EBITDA margin over the next 12 to 18 months. The company’s leverage, measured by Moody’s adjusted debt/EBITDA ratio, is projected to remain below 1.5x during this period.
As of June 30, 2025, Tencent held cash and cash equivalents of RMB474.8 billion, including term deposits and treasury investments, far exceeding its short-term debt of RMB76.9 billion.
The negative rating outlook on Tencent reflects Moody’s view that the rating is constrained at China’s sovereign rating level, given that the company generates most of its revenue from China.
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