Core Viewpoint - Bilibili (09626.HK) has issued 10.3 million Class Z ordinary shares at a price of HKD 140.10 per share [1] Company Summary - The issuance of shares is part of Bilibili's strategy to raise capital [1] - The total capital raised from this issuance amounts to approximately HKD 1.44 billion [1] Industry Context - The issuance reflects ongoing trends in the tech and entertainment sectors, where companies are increasingly seeking to bolster their financial positions through equity financing [1] - Bilibili's move may indicate confidence in its growth prospects despite market volatility [1]

Core Viewpoint - Bilibili Inc. has announced a Concurrent Delta Offering of its Class Z ordinary shares and an upsized offering of US$600 million in convertible senior notes due 2030, reflecting the company's strategic financial maneuvers to support its growth and investor confidence [1][2][4]. Group 1: Offering Details - The Concurrent Delta Offering involves 10,281,240 Class Z ordinary shares priced at HK$140.10 per share, with no new shares being issued, and the company will not receive any proceeds from this offering [3]. - The Notes Offering consists of US$600 million in aggregate principal amount of convertible senior notes, with an option for initial purchasers to buy an additional US$90 million [2][3]. - The Concurrent Delta Offering and the Notes Offering are contingent upon each other, indicating a strategic linkage between the two financial activities [3]. Group 2: Purpose and Strategy - Proceeds from the Notes Offering will be partially used for a Concurrent Repurchase, allowing investors to establish short positions in Class Z ordinary shares to hedge market risk [4]. - The Concurrent Repurchase reflects the company's confidence in its long-term strategy and growth, as repurchased shares will be cancelled [4]. Group 3: Company Background - Bilibili is a leading video community in China, targeting young generations with a mission to enrich their everyday lives through diverse video content [9]. - The company is known for its innovative "bullet chatting" feature, enhancing user engagement by allowing real-time comments during video viewing [9].

Core Viewpoint - Bilibili Inc. has announced the pricing of its upsized offering of US$600 million in convertible senior notes due 2030, aimed at enhancing its content ecosystem and improving monetization efficiency [1][2]. Group 1: Notes Offering Details - The Notes Offering consists of US$600 million in aggregate principal amount, with an option for initial purchasers to buy an additional US$90 million within 30 days [1]. - The Notes will mature on June 1, 2030, and holders can convert them into Class Z ordinary shares at an initial conversion rate of 42.1747 shares per US$1,000 principal amount, representing a conversion premium of approximately 27.1% above the closing price of HK$146.00 on May 21, 2025 [3]. - The Notes will bear interest at a rate of 0.625% per year, payable semiannually starting December 1, 2025 [5]. Group 2: Use of Proceeds - The net proceeds from the Notes Offering will be used to enhance the content ecosystem, facilitate user growth, improve monetization efficiency, fund share repurchases, and for general corporate purposes [2]. - Part of the proceeds will also be allocated for a Concurrent Repurchase, allowing investors to establish initial short positions in Class Z ordinary shares [8]. Group 3: Concurrent Delta Offering - Bilibili has priced a concurrent offering of 10,281,240 Class Z ordinary shares at HK$140.10 per share, which will be borrowed from non-affiliate third parties [6]. - The Concurrent Delta Offering is designed to facilitate hedging transactions for investors subscribing to the Notes, employing a convertible arbitrage strategy [6][7]. Group 4: Redemption and Conversion Terms - The Company may redeem the Notes for cash starting June 6, 2028, if the last reported sale price of Class Z ordinary shares is at least 130% of the conversion price for 20 trading days [4]. - Holders can require the Company to repurchase their Notes for cash on June 1, 2028, or upon certain fundamental changes [4].

Group 1 - Douyin has launched the "Douyin Knowledge Creation Plan," focusing on four content areas: natural science popularization, cutting-edge technology, humanities and social sciences, and prestigious courses, with a commitment to incentivizing quality content through dedicated traffic [1][3] - Douyin has introduced a standalone app called "Douyin Jingxuan," which aggregates high-quality content and represents the platform's advanced content creation direction [3][26] - The competition in the knowledge sector among platforms like Douyin, Kuaishou, Bilibili, and Xiaohongshu is intensifying, with each platform carving out its unique content focus [5][30] Group 2 - The knowledge sector began to gain traction in 2020, with Bilibili launching its "Knowledge Zone" and promoting itself as a learning platform [6][12] - In 2021, Kuaishou introduced the "Kuaishou New Knowledge Broadcast" IP, attracting over 3,000 knowledge creators and achieving over 33 billion total views in just three months [10][17] - By 2022, content creators began to diversify their presence across multiple platforms, with notable figures like He Tongxue adapting their content for Douyin, leading to significant follower growth [20][22] Group 3 - Douyin's "Douyin Jingxuan" aims to provide a more focused content experience by excluding e-commerce features and emphasizing video content [26][28] - Bilibili continues to refine its content strategy by creating subcategories within its "Knowledge Zone," focusing on various academic and professional fields [28][30] - Kuaishou's knowledge content is characterized by practical and straightforward information, appealing to users seeking actionable insights [30][32] Group 4 - The competition for high-quality content is crucial for platforms as they seek to establish themselves as valuable resources in the AI era, with Bilibili emphasizing its role as a leading source of quality video data [33][37] - The perception of knowledge acquisition through short videos remains a topic of debate, with some arguing that these videos serve more as entertainment than genuine educational resources [35][37] - The ongoing battle for the knowledge sector will require platforms to demonstrate genuine support for content creators, moving beyond mere engagement to provide tangible benefits [37][38]

Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected price increase of over 15% in the next 6-12 months [10][8]. Core Insights - The company has entered a profitable phase, with significant improvements in user value and operational efficiency, particularly in its gaming and advertising segments [4][5]. - The first quarter of 2025 saw a revenue of 7 billion HKD, representing a year-on-year growth of 24%, and a Non-GAAP net profit of 360 million HKD, marking a turnaround to profitability [4][5]. - The company is experiencing record-high monthly active users (36.8 million) and daily usage time (108 minutes), indicating strong user engagement and growth [5]. Financial Performance - Revenue projections for 2025, 2026, and 2027 are 30.688 billion HKD, 33.499 billion HKD, and 36.145 billion HKD respectively, with corresponding Non-GAAP net profits of 2.147 billion HKD, 3.140 billion HKD, and 3.972 billion HKD [3][8]. - The company has shown a consistent increase in gross margin, reaching 36.3% in Q1 2025, with high-margin businesses like gaming and advertising contributing significantly to revenue [5][6]. - The average revenue per user is expected to grow, supported by a stable base of premium members and a thriving ecosystem for content creators [7]. Business Segments - The gaming segment, particularly driven by the title "Three Kingdoms: Strategy", has shown a remarkable revenue increase of 76% year-on-year, contributing 17.3 billion HKD in Q1 2025 [6]. - Advertising revenue reached 2 billion HKD in Q1 2025, up 20% year-on-year, largely due to the growth of performance-based advertising driven by AI capabilities [6]. - Value-added services, including premium memberships, generated 2.81 billion HKD in Q1 2025, with a stable membership base of 23.5 million [7].

Core Viewpoint - Bilibili (09626.HK) plans to use the net proceeds from its fundraising to enhance its content ecosystem, accelerate the creation of IP assets, and unlock their intrinsic potential [1] Group 1 - The company aims to strengthen its content ecosystem through strategic investments [1] - The focus on accelerating IP asset creation indicates a commitment to expanding its intellectual property portfolio [1] - The intention to release the intrinsic potential of these assets suggests a long-term growth strategy [1]

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Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected price increase of over 15% in the next 6-12 months [10][8]. Core Views - The company is entering a profitable era with significant user value being released, as evidenced by a strong growth trajectory in revenue and profitability [4][5]. - The gaming segment continues to show robust growth, with a notable increase in revenue driven by popular titles [6][8]. - The advertising revenue is experiencing rapid growth, supported by AI-driven strategies that enhance operational efficiency [6][8]. Financial Summary - Revenue is projected to grow from HKD 22.53 billion in 2023 to HKD 30.69 billion in 2025, reflecting a compound annual growth rate (CAGR) of approximately 14.37% [3][8]. - Non-GAAP net profit is expected to turn positive in 2025, reaching HKD 2.15 billion, with a significant improvement in profitability metrics [3][8]. - The company achieved a Non-GAAP net profit of HKD 360 million in Q1 2025, marking a turnaround from previous losses [4][5]. User Engagement - Monthly active users reached a record high of 368 million in Q1 2025, with an average daily usage time of 108 minutes [5][8]. - The number of paying users has also increased, with 32 million monthly paying users reported [5][8]. Revenue Breakdown - In Q1 2025, revenue from the gaming segment was HKD 1.73 billion, a year-on-year increase of 76%, contributing significantly to overall revenue growth [6][8]. - Advertising revenue reached HKD 2 billion in Q1 2025, up 20% year-on-year, driven by strong performance in effective advertising [6][8]. - Value-added services generated HKD 2.81 billion in Q1 2025, with a stable base of premium members [7][8].

Core Viewpoint - Bilibili Inc. has released its unaudited interim financial statements for the three months ended March 31, 2024, and 2025, along with a management discussion and analysis of financial condition and results of operations [1]. Company Overview - Bilibili is a leading video community in China, targeting young generations with a mission to enrich their everyday lives [3]. - The platform offers a diverse range of video-based content, promoting the value proposition of "All the Videos You Like" [3]. - Bilibili has pioneered the "bullet chatting" feature, enhancing user engagement by allowing real-time comments during video viewing [3]. - The company serves as a hub for diverse interests among young people in China and plays a significant role in promoting Chinese culture globally [3].

Core Viewpoint - Bilibili Inc. is conducting a dual offering, including a proposed offering of US$500 million in convertible senior notes due 2030 and a Concurrent Delta Offering of its Class Z ordinary shares to enhance its content ecosystem and improve monetization efficiency [2][3][5]. Group 1: Offering Details - The proposed Notes Offering is for US$500 million in aggregate principal amount, with an option for initial purchasers to buy an additional US$75 million [2]. - The Concurrent Delta Offering involves borrowing Class Z ordinary shares from third parties, with no new shares being issued, and is designed to facilitate hedging for investors subscribing to the Notes [3][5]. - The Company plans to use part of the proceeds from the Notes Offering for a Concurrent Repurchase of up to US$100 million of its Class Z ordinary shares [4][5]. Group 2: Strategic Intent - The net proceeds from the Notes Offering will be used to enhance the content ecosystem, facilitate user growth, and improve overall monetization efficiency [2][5]. - The Concurrent Repurchase reflects the Company's confidence in its long-term strategy and growth, with repurchased shares expected to be cancelled [5]. Group 3: Company Background - Bilibili is a leading video community in China, focusing on enriching the lives of young generations through diverse video content and community engagement [9]. - The Company is known for its unique "bullet chatting" feature, which enhances user interaction during video viewing [9].