Bilibili Billionaire: Red-Hot Tech Firm Catches a Youth Wave

(Bloomberg) -- It's hard to blame China's biggest tech companies for being just a little envious of Bilibili Inc.

The purveyor of animated videos, comics and mobile games like Sony Corp.'s Fate/Grand Order has an eye-watering 93 million monthly active users whose average age is 21. Bililbili's American depositary receipts surged 73 percent since its initial public offering in March 2018 through Wednesday, the second-best performance in the Nasdaq Golden Dragon China Index of 64 companies that are listed in the U.S. while conducting most of their business in China.

For that it can thank China's Generation Z, a pampered and free-spending cohort that tends not to worry about career prospects or geopolitical upheaval, and whose average member shells out more than $7,000 a year on luxury goods, according to one survey. Social media giant Tencent Holdings Ltd. jumped on the Bilibili bandwagon in October, investing $318 million to increase its stake to 12.3 percent. Alibaba Group Holding Ltd. followed on Feb. 4, acquiring 8 percent.

“Bilibili is so different from other entertainment platforms in China that its anime-related content attracts users,” said Henry Guo at M Science LLC, a data-driven research and analytics firm. “This really lays a solid foundation for the company to monetize user traffic and user engagement.”

On Thursday in Hong Kong, the company posted fourth-quarter revenue that beat analysts' estimates. The ADRs climbed 5.6 percent to $20.97 at 9:30 a.m. in New York.

Read more: Bilibili's beat shows success with ‘under-monetized' Gen Z

Chairman and Chief Executive Officer Chen Rui, 41, has emerged as a big winner, with his 24.2 percent stake now worth $1 billion, according to the Bloomberg Billionaires Index. The company declined to comment on Chen's net worth.

Bilibili keeps its Gen Z clientele hooked with bullet-chatting, a function that enables real-time comments of all users watching the same video flash over the screen.

The feature “allows our users to benefit from the strong emotional bonds with other users who share similar aspiration and interests,” the company said in a prospectus ahead of its IPO.

Chen was born in 1978, the same year Deng Xiaoping launched the “reform and opening-up policy,” which he credited for his success in an interview last year with the Shanghai Morning Post.

“Without the rapid growth after China's opening up over the past 40 years, my personal development would be a totally different story,” Chen said in the interview. “It makes everything possible.”

Cheetah Mobile

Chen studied communication engineering at Chengdu University of Information Technology, and joined billionaire Lei Jun's Kingsoft Corp. after graduating in 2001. Nine years later, he co-founded Cheetah Mobile, a software developer that was spun off from Kingsoft.

Chen, who said in the interview that he's been a comic-book enthusiast since elementary school, started visiting Bilibili.com in 2010. He decided to invest a year later, after meeting founder Xu Yi, whose stake is worth about $500 million.

Chen left Cheetah Mobile after it started trading in New York in 2014, and joined Bilibili in November of that year.

To contact the reporter on this story: Venus Feng in Hong Kong at vfeng7@bloomberg.net

To contact the editors responsible for this story: Pierre Paulden at ppaulden@bloomberg.net, Peter Eichenbaum, Steven Crabill

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