Bilibili Inc., BILI 1.49% the operator of a video app popular with young Chinese videogame and animation fans, is capitalizing on a huge run-up in its shares to raise nearly $3 billion in Hong Kong.
The planned secondary listing for Bilibili, whose shares already trade on Nasdaq, comes soon after Kuaishou Technology, 1024 3.17% the group behind one of China’s most popular TikTok-style apps, raised $6.2 billion from a February initial public offering in Hong Kong.
The stock sale, launched on Wednesday, will be worth about $2.8 billion based on the last closing price of Bilibili’s American depositary receipts, although the final size could be increased 15% under what is called a green-shoe option.
The company counts Tencent Holdings Ltd. , Sony Corp. and a unit of Alibaba Group Holding Ltd. among its investors. Its American depositary receipts have more than quadrupled over the past 12 months, giving it a market capitalization of nearly $40 billion, according to FactSet, although it has reported annual net losses for three straight years since going public in 2018.
The company is joining a group of U.S.-listed Chinese firms that have sold shares in Hong Kong in recent years, in part to tap investors who are more familiar with the Chinese business landscape. The share sales could also help offset the risk of a potential delisting in New York, given heightened pressure over Chinese auditing secrecy, and with some state-backed Chinese companies forced to delist after their addition to a Pentagon investment blacklist.
Shanghai-headquartered Bilibili caters to what it calls “Gen Z+” consumers, born between 1985 and 2009, and prides itself on having a committed fan base. Its videos span topics such as cosplay, fashion, anime, technology, esports and celebrities, and are peppered with “bullet chats,” a format Bilibili pioneered, in which comments fly across the screen during a video.
While social networks often want to make it easy to bring in new members, Bilibili users must pass a 100-item test covering online etiquette and other topics to become official members, which gives them the right to comment on posts. Slightly more than half of Bilibili’s 202 million monthly active users have passed the test.
It earns revenue from mobile games, subscription fees, virtual gifting, advertising and other services. Bilibili reported a net loss of $468 million for 2020, on revenue up 77% to $1.8 billion.
Bilibili plans to sell 25 million new shares to investors and to fix the final offer price on March 23. It plans to list on the Hong Kong stock exchange on March 29 under ticker 9626, it said.
The deal is being led by units of Morgan Stanley, Goldman Sachs Group Inc., JPMorgan Chase & Co., and UBS GROUP AG .
Bilibili set the maximum offer price for a smaller portion of stock reserved for individual investors at 988 Hong Kong dollars per ordinary share, or the equivalent of $127 each. The offer price for stock sold to institutional investors could be higher, it said. One ADR represents one class Z ordinary share, the same kind of stock being sold in the Hong Kong offering.
Write to Joanne Chiu at [email protected]
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