One of the Netflix of China’s biggest competitors soars 7% after earnings show it’s dominating a key demographic

Yu Gong, Founder and CEO of Chinese streaming platform iQiyi Inc., and Robin Li, CEO of Baidu, ring the opening bell at the Nasdaq Market Site to celebrate iQiyi Inc.'s initial public offering (IPO) in New York City.

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Yu Gong, Founder and CEO of Chinese streaming platform iQiyi Inc., and Robin Li, CEO of Baidu, ring the opening bell at the Nasdaq Market Site to celebrate iQiyi Inc.’s initial public offering (IPO) in New York City.
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Reuters/Brendan McDermid

  • Bilibili jumped 7% in Wednesday trading.
  • The rising trend followed a surge among Chinese video-streaming stocks in US action on Monday.
  • Bilibili’s second-quarter earnings beat on the top and bottom lines, and showed it’s winning with China’s Generation Z.
  • Watch Bilibili trade in real-time here.

Shares of Bilibili, one of the biggest competitors of iQiyi, the Netflix of China, jumped more than 7% in Wednesday trading.

The price jump follows a surge among Chinese video-streaming stocks in US action on Monday. The company’s strong second-quarter earnings also accelerated the rising trend.

Bilibili on Monday reported $155.1 million in quarterly sales, easily beating the Wall Street consensus estimate of $146.3 million, according to Bloomberg data. The company also said its adjusted net loss per share narrowed to $0.01 from last year’s $0.4. Analysts were expecting a $0.02 loss per share.

Bilibili competes with IQiyi but is unique for its online hub themed around animation, comics, and games, where users can submit, view, and add commentary subtitles on videos.

“Dynamic, interactive content drove our strong second quarter performance, with continued growth momentum across our business,” said Bilibili CEO Rui Chen in the earnings release.

“Our platform is actively attracting a growing number of users and we continue to see high levels of engagement and user retention rates, thanks to our flourishing community. As we move through the second half of the year, we remain committed to further expanding our user base, curating and acquiring premium content, optimizing our monetization strategy, and reinforcing our leading position as the premier platform for China’s coveted Generation Z online entertainment community.”

The company’s focus on China’s Generation Z community was highlighted by a team of analysts from Morgan Stanley led by Alex Poon.

“We like the company’s multi-monetization channels (games, advertising, value-added service and live streaming), and niche market focus on the sticky Generation Z community with strong user generated content growth momentum, which should drive traffic, advertising business and margins in the long-run,” the team said in an August 22 note to clients.

The team cut its price target to $13.50 from $15 and had an “Overweight” rating on the company before earnings. Bilibili hit its price target in Wednesday trading.

Shares of Bilibili are up 24% since their March initial public offering.

BILI

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Ethel Jiang/Business Insider