Shares of China’s video platform Tuesday have fallen on its launch in the Hong Kong stock market.
Shares opened at HKD $ 790 ($ 101.6; £ 73.7), which is 2.2% below their issuance value, before moving another 4%.
Business Model
The Bilibili is similar to YouTube, but the company hopes to increase revenue with Netflix-style subscriptions.
Listing is the latest of a number of “homecomings” of Chinese companies listed in the US. Chinese firms have demanded a second list in Hong Kong due to an increase in testing by U.S. regulators, which began under President Donald Trump.
In part, the listings are insurance against being kicked off US exchanges, a process which has already started for three Chinese telecommunications companies.
In January, The New York Stock Exchange suspended state-sponsored telcos China Telecom, China Unicom and China Mobile.
The listing for “Homecoming” has not always produced a level of excitement from investors like any other tech list.
Shares of the internet search giant Baidu only edged slightly higher when they listed in Hong Kong last week, while ecommerce giant JD.com also had a lacklustre secondary launch last year.
After a stock price of $ 104 a week ago, Bill collected $ 2.6bn, which was short of the $ 3bn it was expecting.
The company’s launch is the weakest stock market in Hong Kong since shares of Yum China Holdings lost 6.3% in early September last year, according to Refinitiv data.
Premium Content
Currently, Bilibili is not a money-making company, though its prospectus says its revenue has almost tripled since 2018.
According to the prospectus, the video platform had between 202 million users in the last quarter of 2020, an increase of 55% over the same quarter in 2019.
This is less than a third of the controversial video platform Kuaishou, which raised about 190% in the stock market launch last month before recouping some of those profits.
Bilibili is also facing increasing competition from other Chinese-developed platforms.
However, the company hopes to follow in the footsteps of Netflix, and make a profit by offering premium content to subscribers.
Already, the company has 14.5 million subscribers, and has plans to convince many of its users to pay for content.
The company also makes money through advertising, mobile games and e-commerce.
