By Yifan Wang


Shares of Bilibili Inc. were sharply lower in early Hong Kong trade Friday, extending their overnight selloff on Wall Street as investor sentiment soured after the Chinese tech company's disappointing second-quarter results.

The company's Hong Kong-traded stock slumped as much as 17%, putting it on the way for its worst one-day loss in nearly six months. They were last down 16% at HK$152.50. In New York, Bilibili's American depositary receipts fell 15% to US$20.07.

The video sharing company on Thursday posted a net loss of CNY2.01 billion ($288.9 million), significantly widening from a loss of CNY1.12 billion in the year-ago period, missing some analysts' expectations. For the third quarter, the company expects revenue of between CNY5.6 billion and CNY5.8 billion, below the CNY6.0 billion estimated by a FactSet poll of analysts.

"We confronted immense headwinds in the second quarter," the company's chief financial officer Xin Fan said in its earnings call, citing macroeconomic challenges and the strict Shanghai lockdown in May.

Looking ahead, Citi analysts in a note said some of Bilibili's businesses, including its ecommerce sales, could continue suffering "some disruption from Covid" in the second half of the year. The bank cut its ADR's target price to US$38 from US$45 to factor in macroeconomic softness and the impact of Covid-19. "Despite top-line headwinds, we maintain Buy given the company's healthy ecosystem and commitment to narrow loss," the analysts said.

U.S. Tiger Securities analyst Bo Pei also cut its ADR target price to US$31 from US$35, while maintaining a buy call and sharing the Citi analysts' upbeat longer-term outlook on Bilibili.

"Overall, while investors are likely frustrated by the second-half outlook, we'd point out that Bilibili's live streaming and advertising businesses should maintain positive growth and gain market share," he said in a note, "we do believe Bilibili will emerge as a much stronger company when macro [economic conditions] improves."


Write to Yifan Wang at yifan.wang@wsj.com


(END) Dow Jones Newswires

09-08-22 2304ET