Core Viewpoint - Bilibili's Q2 2025 financial results exceeded expectations, with significant growth in revenue and net profit, driven by advertising and live streaming services [1][2] Group 1: Financial Performance - In Q2 2025, Bilibili reported revenue of 7.34 billion CNY, a year-over-year increase of 19.8%, slightly above Bloomberg's expectations by 0.1% [1] - Non-GAAP net profit reached 560 million CNY, compared to a net loss of 270 million CNY in the same period last year, exceeding Bloomberg's expectations by 7.5% [1] - The company anticipates Q3 2025 revenue to reach 7.5 billion CNY, reflecting a year-over-year growth of 21% [1] Group 2: Advertising Revenue - Q2 2025 advertising revenue was 2.45 billion CNY, up 20.2% year-over-year, and also above Bloomberg's expectations by 1.3% [1] - Factors contributing to this growth include participation in the "潮流起飞" project, improved ad distribution efficiency through multimodal models, and AI-generated ad covers enhancing ECPM [1] - The company expects Q3 2025 advertising revenue to reach 2.5 billion CNY, maintaining strong growth due to potential expansion across multiple screens and scenarios [1] Group 3: Live Streaming and VAS Revenue - Live streaming and VAS revenue in Q2 2025 was 2.84 billion CNY, a year-over-year increase of 11%, exceeding Bloomberg's expectations by 0.3% [2] - The growth is primarily driven by the charging business, with expectations for Q3 2025 revenue to reach 3.1 billion CNY, reflecting a year-over-year growth of 10% [2] Group 4: Gaming Revenue - Q2 2025 gaming revenue was 1.61 billion CNY, a significant year-over-year increase of 60%, although slightly below Bloomberg's expectations by 0.2% [2] - Due to a high base from last year's game releases, gaming revenue is expected to decline in Q3 2025 to 1.5 billion CNY, a year-over-year decrease of 15% [2] - New game releases are anticipated to contribute to revenue growth in 2026, with titles like "三国卡牌" and "嘟嘟脸恶作剧" expected to launch by year-end [2] Group 5: Revenue Forecast - The company projects revenues of 30.1 billion CNY, 32.9 billion CNY, and 34.8 billion CNY for 2025, 2026, and 2027 respectively, adjusting previous forecasts due to advertising expansion and revised sales expense predictions [2] - The target price is set at 211.53 HKD (193.06 CNY), based on a comparable company PS average of 2.7x for 2025, maintaining a "buy" rating [2]

Summary of Bilibili's Q2 2025 Earnings Call Company Overview - **Company**: Bilibili - **Industry**: Online Video and Gaming Key Financial Performance - **Total Revenue**: Q2 2025 revenue reached 5.5 billion, a year-on-year increase of 15% [1] - **Adjusted Net Profit Margin**: Improved to 7.6%, marking a return to profitability [1][2] - **Operating Cash Flow**: Net cash flow from operating activities increased by 14% to 1.99 billion [1] - **Gross Margin**: Increased by 6.6 percentage points year-on-year to 36.5% [2] - **Cost Control**: Sales, management, and R&D expense ratios decreased, with total expenses down 4% quarter-on-quarter [2] Revenue Breakdown - **Advertising Revenue**: Grew by 20%, driven by performance advertising [1][3] - **Mobile Gaming Revenue**: Increased by 60%, primarily due to the exclusive game "Three Kingdoms: Strategy" [1][3] - **Value-Added Services**: Revenue rose by 11%, mainly from live streaming and related services [4] - **IP Derivatives and Other Revenue**: Decreased by 15% to 440 million [4] User Engagement Metrics - **Daily Active Users (DAU)**: Reached 109.4 million, a 7% increase year-on-year [5] - **Monthly Active Users (MAU)**: Stood at 363 million, up 8% [5] - **Average Monthly Paying Users**: Increased to 31 million, a 9% rise [5] - **Average Daily Usage Time**: Grew to 105 minutes, an increase of 6 minutes [5] - **Community Engagement**: Offline event "Bilibili World" attracted over 400,000 participants [5] Strategic Focus - **Content Strategy**: Emphasis on mid-to-long video content and exploring community value-added services [6] - **Advertising Growth**: Plans to exceed market average growth in advertising revenue over the next three years [6] - **AIGC Investment**: Increased investment in AIGC to enhance production efficiency [6] Future Outlook - **Gross Margin Expectation**: Anticipated to rise to 37% in the second half of the year [7] - **Operating Profit Margin**: Expected to approach 10% by year-end [7] - **Full-Year Revenue Projection**: Estimated to grow by 12% to around 30 billion [7] - **Adjusted Net Profit Forecast**: Expected to be 2.4 billion [7] - **Market Valuation**: Current P/E ratio is approximately 29 times [3][7] Investment Considerations - **Key Performance Indicators**: Investors should monitor game revenue, new product launches, and advertising breakthroughs to assess commercialization acceleration and profitability potential [3][7]

Investment Rating - The investment rating for the company is "Buy" and is maintained [7] Core Insights - The company reported Q2 2025 revenue of 7.34 billion, representing a year-on-year growth of 20%. Gross profit reached 2.68 billion, up 46% year-on-year, with a gross margin increase of 6.6 percentage points to 36.5%. This marks the 12th consecutive quarter of sequential improvement. The Non-GAAP net profit was 560 million, indicating sustained profitability [2][5] Revenue Breakdown - Advertising revenue for Q2 2025 was 2.45 billion, a year-on-year increase of 20%. The growth was driven by enhanced advertising efficiency through AI integration and an increase in the number of advertisers by over 20% year-on-year [11] - Value-added services revenue was 2.84 billion, showing nearly 11% year-on-year growth, supported by high user retention rates with 270 million official members and an 80% retention rate over 12 months [11] - Mobile gaming revenue reached 1.61 billion, a significant year-on-year increase of 60%, primarily due to the strong performance of the game "Three Kingdoms: Strategize" [11] Operational Metrics - The company's community ecosystem continues to thrive, with Daily Active Users (DAU) reaching 109 million and Monthly Active Users (MAU) at 363 million. The average daily usage time was 105 minutes [11] - The platform supports nearly 2 million content creators, with a 60% increase in the number of creators earning income through video and live streaming [11] Profitability Analysis - The gross profit for Q2 2025 was 2.68 billion, reflecting a 46% year-on-year increase, driven by high-margin business growth and effective cost control. The gross margin improved to 36.5% [11] - The Non-GAAP net profit of 560 million indicates ongoing profitability, with a net operating cash flow of 1.99 billion, marking eight consecutive quarters of positive cash flow [11]

Group 1 - The company achieved revenue of 7.338 billion yuan in Q2 2025, representing a year-over-year increase of 19.8% [1] - Adjusted net profit attributable to shareholders for Q2 2025 was 561 million yuan, marking a turnaround from loss to profit [1] - The gross margin for Q2 2025 was 36.5%, an increase of 6.5 percentage points year-over-year [1] Group 2 - Mobile game revenue reached 1.61 billion yuan, in line with expectations, and grew by 60% year-over-year [1] - Value-added services revenue was 2.84 billion yuan, also meeting expectations, with an 11% year-over-year increase [1] - Advertising revenue exceeded expectations at 2.45 billion yuan compared to the consensus of 2.42 billion yuan, reflecting a 20% year-over-year growth [1] Group 3 - The game "Three Kingdoms: Strategy" has been operating steadily for one year, contributing positively to the company's gaming business [1] - The anniversaries of "Fate/Grand Order" and "Azur Lane" have boosted player engagement, with expectations for increased revenue from "Three Kingdoms: Strategy" upon its overseas launch in Q4 [1] - The company is continuously improving its product portfolio, with several upcoming games expected to pass approval for launch [1] Group 4 - The company reported a healthy growth in core users, with daily active users (DAU) reaching 108 million, up 6% year-over-year [2] - Monthly active users (MAU) reached 365 million, reflecting an 8% year-over-year increase [2] - The average daily usage time per user increased by 3.9% to 106 minutes, and the number of monthly paying users reached 32 million, up 10% year-over-year [2] Group 5 - The company’s advertising business saw a customer base growth of over 20% year-over-year, with increased advertising budgets [2] - The top five advertising categories were games, digital appliances, online services, e-commerce, and automotive [2] Group 6 - Revenue projections for the company are estimated at 30.08 billion yuan, 33.12 billion yuan, and 36.15 billion yuan for the years 2025, 2026, and 2027 respectively [2] - Adjusted net profit forecasts for the same years are 2.11 billion yuan, 2.96 billion yuan, and 3.89 billion yuan [2]

Group 1: Market Overview - The Hang Seng Index is expected to face resistance around 24500-24600, with bearish investors holding overnight positions, while some bullish investors maintain positions with a target of 26000 [1] - The index closed at 25077, remaining below the middle line of the Bollinger Bands, with short-term technical signals indicating a "sell" [1] Group 2: Bilibili (09626.HK) - Bilibili's stock price rebounded from the lower Bollinger Band, closing at 180.9, with an intraday high of 183, approaching the middle line of the Bollinger Bands at 185 [3] - Technical signals are neutral, with short-term resistance levels at 190.2 and 202.8, and support levels at 173.6 and 164 [3] Group 3: BYD Company (01211.HK) - BYD's stock price showed strong performance, closing at 114.4, above the middle line of the Bollinger Bands, with a cautious "buy" signal [8] - Resistance levels are identified at 120.4 and 125.4, while support levels are at 111.4 and 107.5, indicating a safe area for investors holding bullish positions [8] Group 4: PetroChina (00857.HK) - PetroChina's stock price closed at 7.51, near the middle line of the Bollinger Bands, with a short-term technical signal indicating a "sell" [11] - Investors holding call options with a strike price of 8.88 face a significant out-of-the-money margin, which could increase if the stock price declines further [11] Group 5: Li Auto (02015.HK) - Li Auto's stock closed at 91.7, with a "buy" signal and resistance levels at 99.3 and 110.6, while support levels are at 88.3 and 83.1 [13] Group 6: Zhaojin Mining (01818.HK) - Zhaojin Mining's stock price has risen from 19.4 to 24.1, breaking through the upper Bollinger Band, with a technical signal indicating a "sell" [20] - Support levels are identified at 22.3 and 21.1, suggesting potential areas for price stabilization [20]

Market Performance - The Hang Seng Index closed at 25077.62 points, up by 78.8 points, representing a gain of 0.32% [1][2] - The National Enterprises Index closed at 8947.79 points, increasing by 30.86 points, with a rise of 0.35% [1][2] - The Red Chip Index closed at 4273.06 points, down by 15.29 points, reflecting a decline of 0.36% [1][2] Capital Flow - Southbound funds recorded a net inflow of 12.046 billion Hong Kong dollars on the day [1] Stock Performance - Notable gainers included Guotai Junan International, which rose over 15%, BYD Electronics, which increased by over 7%, and WuXi AppTec, which gained over 6% [1] - Other significant gainers included Bilibili and Li Auto, both rising over 4% [1] - Major decliners included ZTE Corporation, which fell over 9%, and Hua Hong Semiconductor, which dropped nearly 6% [1]

Group 1 - The core viewpoint is that the gaming industry in China has returned to a growth trajectory in the first half of 2025, with overseas revenue from self-developed games reaching $9.501 billion, marking a year-on-year increase of over 11% [1] - The China Securities Index for the gaming and cultural media sector has shown a slight increase of 0.01% as of August 29, 2025, with notable gains from companies such as Rock Mountain Technology (up 5.59%) and China Film (up 2.43%) [1] - The Gaming Media ETF has risen by 0.98%, with the latest price reported at 1.23 yuan [1] Group 2 - The report from Huayuan Securities emphasizes the importance of focusing on companies with better-than-expected mid-year performance, particularly in high-growth sectors like gaming and new consumer trends [2] - The index tracks 50 listed companies involved in gaming, film, broadcasting, marketing, publishing, education, and cultural performances, reflecting the overall performance of the gaming and cultural media theme in the mainland and Hong Kong markets [2] - As of July 31, 2025, the top ten weighted stocks in the index accounted for 52.86% of the total, with major players including Kuaishou-W, Tencent Holdings, and Bilibili-W [3]

Investment Rating - The investment rating for the company is "Buy" (maintained) [3] Core Views - The company achieved revenue of 7.338 billion yuan in Q2 2025, representing a year-over-year increase of 19.8%, and adjusted net profit of 561 million yuan, marking a return to profitability [6] - The gross margin for Q2 was 36.5%, an increase of 6.5 percentage points year-over-year [6] - Mobile game revenue reached 1.61 billion yuan, up 60% year-over-year; value-added services revenue was 2.84 billion yuan, up 11% year-over-year; advertising revenue exceeded expectations at 2.45 billion yuan, up 20% year-over-year; while IP derivatives and other income decreased by 15% year-over-year to 440 million yuan [6][7] - The core user base is growing healthily, with daily active users (DAU) reaching 108 million, up 6% year-over-year, and monthly active users (MAU) at 365 million, up 8% year-over-year [8] - The company expects revenues of 30.08 billion yuan, 33.12 billion yuan, and 36.15 billion yuan for 2025, 2026, and 2027 respectively, with adjusted net profits of 2.11 billion yuan, 2.96 billion yuan, and 3.89 billion yuan for the same years [9] Financial Summary - Total revenue for 2024 is projected at 26.832 billion yuan, with a year-over-year growth of 19.1% [12] - Adjusted net profit for 2025 is expected to be 2.114 billion yuan, a significant increase from a loss of 22 million yuan in 2024 [12] - The company’s gross margin is projected to improve from 32.7% in 2024 to 39.7% in 2027 [14] - The earnings per share (EPS) is forecasted to rise from -0.05 yuan in 2024 to 9.42 yuan in 2027 [15]

Investment Rating - The report maintains a "Recommended" rating for Bilibili (BILI) [1] Core Views - The company's Q2 2025 financial results exceeded expectations, with total revenue reaching 7.34 billion yuan, a year-over-year increase of 20%, aligning with Bloomberg consensus [1] - The adjusted net profit attributable to shareholders was 560 million yuan, marking a return to profitability and surpassing Bloomberg consensus by 8% [1] Financial Summary - **Revenue Forecasts**: - 2024A: 26,832 million yuan - 2025E: 30,071 million yuan (YOY +12.1%) - 2026E: 32,638 million yuan (YOY +8.5%) - 2027E: 34,899 million yuan (YOY +6.9%) [4] - **Net Profit Forecasts**: - 2024A: -1,347 million yuan - 2025E: 903 million yuan (YOY +167.0%) - 2026E: 1,986 million yuan (YOY +120.0%) - 2027E: 3,029 million yuan (YOY +52.5%) [4] - **Earnings Per Share (EPS)**: - 2024: -3.20 yuan - 2025: 2.15 yuan - 2026: 4.72 yuan - 2027: 7.20 yuan [4] - **Valuation Ratios**: - Price-to-Earnings (P/E) ratio for 2025E: 75.3 - Price-to-Book (P/B) ratio for 2025E: 4.5 [4] - **Target Price**: The target price is set at $27.52, with the current price at $22.74 [4] Business Segment Performance - **Gaming Business**: Revenue for Q2 2025 was 1.61 billion yuan, a year-over-year increase of 60%, driven by the success of the "Three Kingdoms: Strategy" game [8] - **Advertising Business**: Revenue reached 2.45 billion yuan in Q2 2025, a year-over-year increase of 20%, benefiting from AI-driven efficiency and e-commerce demand [8] - **VAS (Value-Added Services) Business**: Revenue was 2.84 billion yuan in Q2 2025, a year-over-year increase of 11%, supported by live streaming and other services [8]

Market Performance - The Hong Kong stock market continued to decline in the afternoon, with the Hang Seng Technology Index dropping over 2%, the Hang Seng Index falling by 1.4%, and the National Enterprises Index decreasing by 1.6% [1] - Major stocks in the Hang Seng Technology Index experienced significant declines, including Meituan down over 12%, Xpeng Motors down over 8%, and JD Group, Alibaba, and Li Auto each down over 4% [1] Stock Specifics - Meituan (03690) fell by 12.73% year-to-date, with a total decline of 33.09% [2] - Xpeng Motors (09868) decreased by 8.76%, but has seen an increase of 80.92% year-to-date [2] - JD Group (09618) dropped by 4.78%, with a year-to-date decline of 12.58% [2] - Alibaba (09988) fell by 4.69%, but has increased by 43.94% year-to-date [2] - Li Auto (02015) decreased by 4.21%, with a year-to-date decline of 6.81% [2] - Other notable declines include Kingdee International down 3.92% (year-to-date increase of 86.64%), Bilibili down 3.70% (year-to-date increase of 19.30%), BYD Electronic down 3.62% (year-to-date decline of 10.07%), and BYD Company down 3.48% (year-to-date increase of 27.09%) [2]