Bilibili completes secondary listing in Hong Kong
Shanghai-based video and entertainment platform Bilibili became the latest local tech company to join tech giants like Alibaba and JD to complete its secondary listing on the Hong Kong stock market — part of a wave of domestic companies listing closer to home.
Market watchers cited recent geopolitical tensions and closer ties with the domestic capital market as driving forces behind the latest wave.
Bilibili shares opened 2.2 percent lower from its offering price of HK$808 this morning after raising US$2.6 billion and shed as much as 5 percent in midday trading.
It recovered some earlier losses and closed down 0.99 percent at HK$800.
"I remain confident about our long-term growth despite the sluggish opening, and our long term user growth and ecosystem benefits will eventually support the stock value," said Bilibili Chairman and CEO Chen Rui.
Mandy Zhu, head of global banking at UBS China, said Bilibili's Hong Kong listing attracted more reputable Asian institutional and retail investors which facilitates closer ties with Bilibili’s user market.
She also expects to see more US-listed Chinese companies consider secondary listing in Hong Kong in light of recent geopolitical tensions and equity market turbulence.
Last week, Baidu raised US$3.1 billion in its Hong Kong secondary listing after setting a listing price of HK$252, with shares rising a modest 0.8 percent to HK$254.
“The Hong Kong market continues to be the first choice for Chinese concept stocks pursuing secondary listings," said Derek Shao, PricewaterhouseCoopers (PwC) China assurance partner. "The implementation of the Foreign Company Accountability Act will increase the difficulties and uncertainties for Chinese companies’ listings in the United States, but it will also serve as a boost for domestic companies seeking secondary listings in Hong Kong or overseas."
In 2020, there were 164 initial public offerings by mainland technology, media and telecommunications companies, a nearly 58 percent increase over 2019, raising almost 347 billion yuan — close to twice as much as the previous year, according to PwC.
"The recent volatility of the global equity market has forced Chinese companies to seriously consider whether they need to build bigger cash reserves or become listed companies with easier access to capital in response to unexpected situations," said Zhu.
Altogether 12 video creators joined Bilibili executives to strike the gong at the listing ceremony.
Chen said the company has grown significantly in terms of revenue and its active user base since listing on NASDAQ three years ago, and believes video content will join the mainstream of internet communications.
Driven by increasing demand for a diverse range of video-based content, domestic consultancy iResearch predicts the size of China's video industry will grow at an annual rate of 20.7 percent and reach 1.8 trillion yuan by 2025 — up from 582.9 billion yuan in 2019. It estimates the membership and paid content market will be worth 123 billion in 2025.
"The new wave of digitization and embrace of video content should provide sufficient growth potential to double our monthly active user base, and our professional user-generated video content and ecosystem gives us a competitive advantage over most video streaming sites," said Chen. "Bilibili will become home to tens of millions of professional video creators, spreading their content and spirit to the entire world."
Proceeds from the listing will be used to support user growth, foster the company's content ecosystem and develop its community, as well as for sales and marketing to raise brand awareness.