Bank of America Securities issued a research report stating that with the implementation of the convertible bond issuance, uncertainties regarding HTSC's (06886) capital raising efforts have largely been eliminated. The firm upgraded its investment rating from "Neutral" to "Buy," citing the current valuation as still attractive. It also noted that the company's fundamental operations remain robust, and the overseas capital replenishment could provide upside potential. Profit forecasts were maintained, with a target price of HK$22.1. HTSC announced plans to issue HK$10 billion zero-coupon convertible bonds maturing next year, with a conversion price of HK$19.7 per share. This price represents 1 times the 2024 price-to-book ratio excluding dividends. If fully converted, the potential dilution would be approximately 5.6%. The proceeds from the fundraising will be used to support the expansion of overseas business, aligning with the board's previously stated plan to inject RMB 9 billion into international operations. Bank of America Securities indicated that following this issuance, the company still retains room for equity financing under the general mandate, with a potential issuance size of up to 20% of the total share capital.
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