Tencent, CATL's Inclusion on U.S. Defense List Unlikely to Dent Credit Outlook -- Market Talk

Dow Jones01-07

0654 GMT - Tencent and CATL's inclusion on the U.S. Defense Department's list of Chinese military companies is unlikely to have much negative impact on their credit fundamentals for now, CreditSights analysts say. They stay constructive on the firms' credit outlook, noting that both called the inclusion a mistake. CreditSights notes that Tencent derives over 90% of its revenue from China and isn't reliant on the U.S. for Ebitda or cashflow generation. The risk of its WeChat operations being banned also seems relatively low, it adds. CATL's revenue exposure seems limited as well, given pre-existing trade barriers has already restricted its expansion in the U.S., the analysts note. CreditSights expects CATL's credit outlook to improve in 2025, with better topline growth, higher Ebitda margins and a healthy net cash position. (fabiana.negrinochoa@wsj.com)

(END) Dow Jones Newswires

January 07, 2025 01:54 ET (06:54 GMT)

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