Tencent Holdings Limited (TENCENT-R, 80700) intends to raise fresh debt through an international offering of senior notes under its Global Medium Term Note Programme (up to CNY- and multi-currency tranches). J.P. Morgan, ICBC (Asia), Agricultural Bank of China, Bank of China, Bank of Communications, China Construction Bank, CITIC Securities, Goldman Sachs, HSBC and Morgan Stanley will act as joint global coordinators. Completion will hinge on market conditions and investor appetite; no public tranche is planned for Hong Kong, the United States or other jurisdictions.

Financial highlights from the management discussion released alongside the proposed issue are as follows:

Revenue Momentum • H1 2026 revenue reached RMB 401.24 billion, up 10% year-on-year. • FY 2025 revenue rose 14% to RMB 751.77 billion, following 8% growth in FY 2024 to RMB 660.26 billion. • Core drivers in H1 2026: Value-Added Services (VAS) RMB 194.52 billion (48% of total), Marketing Services RMB 81.74 billion (21%), FinTech & Business Services RMB 120.17 billion (30%).

Profitability • H1 2026 gross profit advanced 12% to RMB 229.70 billion; gross margin improved to 57%. • H1 2026 profit for the period rose 11% to RMB 117.37 billion, maintaining a 29% net margin. • FY 2025 profit climbed 17% to RMB 229.80 billion, lifting the annual net margin to 31% from 30% in FY 2024.

Segment Trends • Domestic Games (H1 2026): revenue RMB 92.70 billion, +11% YoY, buoyed by Delta Force, VALORANT, Roco Kingdom: World and Wuthering Waves. • International Games (H1 2026): revenue RMB 37.40 billion, +6% YoY, led by Clash Royale and PUBG MOBILE. • Social Networks (H1 2026): revenue slipped 0.7% to RMB 64.40 billion. • Marketing Services (H1 2026): surged 21% to RMB 81.74 billion on AI-enhanced ad targeting and stronger Video Accounts and Weixin Search demand. • FinTech & Business Services (H1 2026): up 9% to RMB 120.17 billion, with higher commercial payments, wealth management, consumer lending and AI-driven cloud demand.

Operational Metrics • Combined monthly active users of Weixin and WeChat reached 1.439 billion as at 30 June 2026, +2% YoY. • Mobile QQ MAU stood at 520 million.

Cash Flow and Liquidity • H1 2026 operating cash flow: RMB 154.06 billion; free cash supported by lower tax outflow. • Cash and cash equivalents rose to RMB 206.93 billion at 30 June 2026 (up from RMB 141.04 billion at FY 2025). • Term deposits and other liquid investments totalled RMB 304.22 billion at 30 June 2026.

Leverage and Funding • Total borrowings reached RMB 298.94 billion at 30 June 2026, versus RMB 250.99 billion at FY 2025. • Notes payable increased to RMB 154.02 billion at 30 June 2026, following multiple outstanding USD- and CNY-denominated issues maturing between 2028 and 2061. • Capital commitments escalated to RMB 92.73 billion, mainly for technology infrastructure, land use rights and strategic investments.

Capital Expenditure • H1 2026 capex amounted to RMB 96.30 billion, reflecting intensified investment in AI infrastructure, data centres and content.

Risk Management Tencent highlighted active management of foreign-exchange, price and interest-rate risks, underpinned by diversified funding sources, a sizeable cash buffer and the use of hedging instruments where appropriate.

Outlook Management underscored plans to deepen AI integration across games, marketing and business services while leveraging its 1.44 billion Weixin/WeChat user base for monetisation. The proposed note issuance aims to enhance balance-sheet flexibility as the group continues to scale investments in technology and content.

No binding agreement has yet been signed for the note offering; investors are advised to exercise caution when dealing in Tencent securities. Further updates will be provided in due course.