NEW YORK (TheStreet) -- YY Inc (YY) shares are up 8.5% to $70 in trading Tuesday.
The Chinese social media platform is seeing the rise after it issued $400 million in five year convertible bonds with 2.25% coupon rate and 35% conversion premium over Monday's close of $68.65.
Citigroup (C), Deutsche Bank (DB) and Morgan Stanley (MS) were joint bookrunners for the issuance.
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TheStreet Ratings team rates YY INC -ADR as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:
"We rate YY INC -ADR (YY) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its notable return on equity, robust revenue growth and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we find that the stock itself is trading at a premium valuation."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Compared to other companies in the Internet Software & Services industry and the overall market, YY INC -ADR's return on equity significantly exceeds that of both the industry average and the S&P 500.
- YY's very impressive revenue growth greatly exceeded the industry average of 16.1%. Since the same quarter one year prior, revenues leaped by 136.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
- YY has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 3.23, which clearly demonstrates the ability to cover short-term cash needs.
- The gross profit margin for YY INC -ADR is rather high; currently it is at 51.53%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 31.19% significantly outperformed against the industry average.
- You can view the full analysis from the report here: YY Ratings Report