Business

Bilibili raises up to $3.2 billion in Hong Kong secondary listing amid a cooling market

Chineses video-sharing platform Bilibili Inc. (9626) planned to raise as much as $3.2 billion (HK$ 24.85 billion) in its secondary listing in Hong Kong, while the recent corrections in the market may force the company to price the stock below its maximum offering price.

The public offer commenced on Thursday and would run through Mar.23, with trading expected to start on Mar.29, its listing document said.

The Shanghai-based Bilibili, backed by Tencent Holdings Ltd. and Alibaba Group Holding Ltd., went public on Nasdaq in March 2018 (Nasdaq: BILI). Its 25 million Hong Kong shares are on offer at a maximum price of HK$988 apiece, 16.9% higher than its U.S. stock closing price of $108.82 (HK$ 845.18) on Thursday. Each American depositary receipt represents one ordinary share to be listed in Hong Kong.

"Recent declines in the share prices of many US technology stocks and the volatility in the Hong Kong stock market could depress Bilibili's final price," said Wang Hui, a portfolio manager at Haitong Securities. "The final offer price will have a lot to do with the value of Bilibili’s American Depositary Receipts in the coming week, as well as the investor demand level."

Baidu, another technology stock listed in the U.S, just completed its Hong Kong IPO on March 17. It initially priced its shares at HK$295 based on the average trading price of its US stocks in the previous period of time. But eventually, Baidu cut its offer price by 14.6% to HK$252 due to the recent decline in its US share price. The Nasdaq Composite Index fell 7.5% from its 2021 high of 14,175.12 to close at 13,116.17 overnight. The Hang Seng Index closed at 29,405.72 on Wednesday, down 5.7% from its 2021 peak of 31,183.36.

Bilibili generates its revenues primarily from mobile games, value-added services, advertising, and e-commerce and others. According to the company’s prospectus, Bilibili’s revenue in 2020 increased by 77% to 12 billion yuan (HK$ 14.3 billion). Monthly average users reached 202 million in the fourth quarter of 2020, up 55% year-on-year. According to iiMedia Research, the number of video users in China will reach 1.2 billion by 2025, and the size of the video market will exceed 1.8 trillion yuan (HK$ 2.15 trillion).

"Kuaishou, which was previously listed in Hong Kong, was a pure short video platform. However, Bilibili covers various types of videos, which is similar to YouTube, but with the added ‘community’ attribute that can connect users," said Ms Wang. "Investors in Mainland China and Hong Kong who are familiar with Bilibili's unique business model will recognize its value."

The first day of Hong Kong share offer attracted bids for about HK$18.56 billion margin loan, an oversubscription of 24 times for the retail portion, according to the data from banks and brokerages generated by Hong Kong Economic Times. Bilibili's International placement has been fully subscribed, IFR said, citing a source familiar with the matter.

However, Bilibili's net loss widened to 3 billion yuan (HK$ 3.58) in 2020, up 134% year on year, as sales and marketing expenses and research and development expenses soared. The company also warned in the prospectus that it may continue to experience losses in the future due to continued investments in technology, talent, content, brand recognition, user base expansion, and other initiatives.

Morgan Stanley, Goldman Sachs, JP Morgan, UBS are the joint sponsors for Bilibili’s Hong Kong offering.

Bilibili is a Chinese video-sharing platform offering videos of various fields.

《The Young Reporter》

The Young Reporter (TYR) started as a newspaper in 1969. Today, it is published across multiple media platforms and updated constantly to bring the latest news and analyses to its readers.

Comments

Hong Kong releases electric vehicle roadmap, to ban petrol cars from 2035

Hong Kong Vaccination