Two popular Chinese online video websites, Bilibili and iQiyi, are going public next week in the US. Both companies started out as video streaming sites. But have now grown into booming integrated entertainment communities. Yu Wen takes a closer look.

Bilibili, or as it is better-known, B Zhan, will be filing for a listing worth some 500 million dollars. iQiyi is hoping for something over 2 billion dollars, at least 40% up from its original plan. Even though iQiyi's overall revenue in 2017 climbed to over 17 billion yuan, it has still suffered from deficits for three years in a row. Bilibili didn't escape from the loss cycle, either. It was 1 billion yuan in the red last year.

TANG ZHEHUI ASSURANCE PARTNER, EY "Given that the costs of video streaming sites are quite high, these companies are suffering from deficits for now, which means they do not qualify to seek initial public offerings on the A-share market. That's the reason they have to go public in the US. Meanwhile, there are lots of new policies coming up, including Chinese depository receipts. Overseas-listed companies, therefore, now will have the ability to return to the A-share market."

iQiyi's advertising revenues accounted for some 47% of its overall income last year, surging 140% from that in 2015. Mobile gaming was the primary contributor to Bilibili's income, 83.4% of last year's overall revenues. Both companies are trying to develop by investing more in content development. According to iQiyi's IPO application released last week, nearly half the fundraising will be put into content development. Bilibili, which features a live comment facility called "bullets" for its video clips, has a reward policy for frequent uploaders of video material.

HUANG YIHE RESEARCH ANALYST, MINTEL "Bilibili is one of the pioneers in introducing bullet commenting to the China market. Mintel research reviewed that 38% of users watch video with comments so that it can encourage uploaders to interact with audiences and continuously provide new content. And iQiyi can better control the quality of content because they can get feedback and can learn more based on the feedback."

By the end of last month, iQiyi's subscription members passed 60 million, nine million of those in just the first two months the year. Meanwhile, Bilibili gained over 70 million users in 2017, 81.7% of whom were born in Generation Z, between 1990 to 2009.