We believe risk to VIE structures in China has reduced, prompting us to revise upward our SACP on Tencent Holdings Ltd. to 'aa-' from 'a+'. However, in our opinion, Tencent's predominant domestic revenues subject it to China's transfer and convertibility (T&C) risk. On July 17, 2019, S&P Global Ratings affirmed its 'A+' long-term issuer credit rating on Tencent and its 'A+' long-term issue rating to the China-based internet company's senior unsecured notes. The stable outlook reflects our expectation that Tencent will maintain its solid revenue growth, top market position in several online platforms, and strong cash flows over the next 12-24 months. We affirmed the ratings on Tencent despite the reducing risk from variable interest entity (VIE) structures because of
