Bilibili seeks dual-primary listing in Hong Kong by October 3, as short video platform moves to bolster home ties
- Bilibilli has green light from stock exchange to proceed with its plans for conversion to primary listing status
- Separately, Shenzhen Pagoda Industrial, the largest fruit retail operator in China, files for IPO in Hong Kong
Nasdaq-listed short video platform Bilibili expects to convert its secondary listing status in Hong Kong into a dual primary listing by October 3, the company said in a stock exchange filing on Monday.
The company, which listed and raised US$2.6 billion in Hong Kong in March last year through a secondary listing, said it has already applied and gained the green light from the stock exchange to proceed with its conversion proposal. The company listed on Nasdaq in March 2018.
The Shanghai-based platform said it would need to make a number of changes to its internal controls, disclosure, and certain staffing arrangements to meet Hong Kong listing rules and facilitate the primary listing in the city. It also needs shareholder approval and a final nod from the stock exchange for its conversion plan.
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For example, it will need to appoint a local qualified company secretary. It will also have to detail and list the differences between its accounting treatment in the US and Hong Kong to shareholders. It expects the conversion to dual primary status to become effective on or around October 3.
Bilibili said the move was due to “the significant increase in the trading volume of the shares traded on the Stock Exchange since the secondary listing in Hong Kong, the nexus between Hong Kong and the principal business operations of the company in the People’s Republic of China, as well as the long-term business development and prospects of the company.”
A dual-primary listing will enable the company to potentially be included in the Stock Connect schemes, a mutual market access mechanism that allows mainland Chinese investors to trade Hong Kong stocks and vice versa. This option is not available to companies listed through secondary flotations.
Bilibili is among a host of US-listed mainland companies seeking secondary or primary flotations closer to home, as a hedge against the risk of being kicked off American exchanges over stricter audit requirements.
The Holding Foreign Companies Accountable Act (HFCAA), which came into effect in late 2020, requires US-listed foreign firms to comply with audit inspection rules under the Public Company Accounting Oversight Board (PCAOB), or face the risk of being delisted from US stock exchanges after three consecutive years of non-compliance.
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Bilibili’s share price rose 13 per cent last Friday to close at HK$203.6, but its share price is down around 75 per cent from its offering price last March, following a months-long crackdown on the tech sector by Beijing. The city’s stock market was closed on Monday due to a public holiday.
Separately, Shenzhen Pagoda Industrial (Group) Corporation, the largest fruit retail operator in China, also filed a listing application to the Hong Kong stock exchange’s main board on Monday.
The company sells fruit through multiple e-commerce platforms, including Alibaba Group Holding’s Tmall and JD.com, as well as sold through 5,351 physical stores located in over 130 mainland cities.
Its revenue increased by 16.2 per cent to 10.29 billion yuan last year, the company said in its filing, and Morgan Stanley is the sole sponsor. It did not provide more details about its IPO plan.
