Investment Rating - The report assigns a "Buy" rating for both US and Hong Kong stocks of Bilibili (BILI), with a current price of 13.74 USD / 106.3 HKD and a fair value of 24.75 USD / 193.28 HKD [1][18]. Core Insights - The company reported a total revenue of 56.65 billion RMB for Q1 2024, exceeding consensus expectations and showing a year-over-year growth of 12% [7][9]. - The gross margin improved to 28.3%, up 6.6 percentage points year-over-year, indicating effective cost management and revenue growth strategies [7][13]. - The net loss attributable to shareholders was 7.5 billion RMB, which was better than the expected loss of 8.15 billion RMB, reflecting a significant reduction in losses [7][9]. User Growth and Engagement - In Q1 2024, Daily Active Users (DAU) reached 102.4 million, a year-over-year increase of 9%, while Monthly Active Users (MAU) were 34.2 million, also up 8% [3][4]. - The average daily time spent per user was 105 minutes, marking a new high and a 9% increase year-over-year [3][4]. Revenue Breakdown - Advertising revenue for Q1 2024 was 16.69 billion RMB, up 31% year-over-year, driven by improved product efficiency and healthy overall traffic growth [9][11]. - Live streaming and Value-Added Services (VAS) revenue reached 25.29 billion RMB, a 17% increase year-over-year [9][11]. - Game revenue was 9.83 billion RMB, down 13% year-over-year, primarily due to a lack of new product launches [11][12]. Profitability and Cost Management - The report highlights a strategy focused on increasing gross profit while reducing losses, with operational expenses showing a slight decrease year-over-year [7][15]. - The management expenses were reported at 5.3 billion RMB, down 7% year-over-year, while sales expenses were 9.27 billion RMB [13][15]. Future Projections - The company expects advertising revenue to grow by 30% and 23% in 2024 and 2025, respectively, reaching 83 billion RMB and 102 billion RMB [18][19]. - Total revenue is projected to grow by 14% and 15% in 2024 and 2025, reaching 256 billion RMB and 296 billion RMB [18][19]. - The report anticipates a gradual improvement in profitability, with a forecasted non-GAAP net loss of 12.24 billion RMB in 2024 and a potential profit of 11.29 billion RMB in 2025 [18][19].

Investment Rating - The investment rating for Bilibili-W (9626.HK) is "Buy" and is maintained [5]. Core Insights - Bilibili reported Q1 2024 revenue of 5.665 billion CNY, a year-on-year increase of 12%. Gross profit reached 1.605 billion CNY, up 45% year-on-year, with a gross margin of 28.3%, an increase of 6.5 percentage points compared to the same period last year. The Non-GAAP net loss was 456 million CNY, narrowing by 56% year-on-year. The company achieved positive operating cash flow of 638 million CNY for three consecutive quarters [6][7]. Revenue Analysis - Bilibili's advertising revenue for Q1 2024 was 1.669 billion CNY, a year-on-year growth of 31%. The company has optimized its advertising products and upgraded its effect delivery platform, leading to a more than 50% increase in effect advertising revenue [6][7]. - The revenue from value-added services was 2.529 billion CNY, a 17% increase year-on-year, driven by growth in live streaming and value-added service sales. The number of official members reached 236 million, with a 12-month retention rate of approximately 80% [6][7]. - Game revenue was 983 million CNY, a decline of 13% year-on-year, primarily due to decreased revenue from older games. New game launches are expected to boost future revenue [6][7]. User Engagement Metrics - Daily active users (DAU) grew by 9% year-on-year to 102.4 million, while monthly active users (MAU) increased by 8% to 341.5 million. The average daily usage time reached a historical high of 105 minutes [6][7]. - The average daily video views approached 5 billion, a 22% year-on-year increase, with Story-Mode vertical video views also growing by 22% [6][7]. Profitability Insights - Bilibili's gross profit for Q1 2024 was 1.605 billion CNY, with a gross margin of 28.3%, marking the seventh consecutive quarter of sequential improvement. This was attributed to increased revenue and improved monetization efficiency [7]. - The Non-GAAP net loss narrowed to 456 million CNY, a 56% year-on-year reduction, with operating cash flow turning positive for three consecutive quarters [7]. Earnings Forecast - The company is expected to optimize its commercialization capabilities and operational efficiency, projecting revenues of 25.4 billion CNY and 28.2 billion CNY for 2024 and 2025, respectively, while maintaining a "Buy" rating [7].

Market Overview - Chinese stocks are under scrutiny due to shifting global market dynamics, with higher interest rates expected to divert capital from riskier assets like Chinese stocks [1] - Recent military drills by China near Taiwan have added volatility to the Chinese stock markets amid U.S.-China tensions [1] - Investors are advised to be cautious when selecting Chinese stocks due to an unpredictable regulatory environment and complex geopolitical issues [1] Bilibili (BILI) - Bilibili, known as China's YouTube, has over 300 million monthly users and more than 100 million daily active users [2] - Despite a 20% year-to-date stock increase, the company faces modest growth with a year-over-year revenue growth of only 5.51%, significantly lower than its five-year average of 48% [2] - The company's financial metrics show negative year-over-year net income, EBITDA, and return on equity [2] Bilibili's Q1 Results - In its first-quarter results, Bilibili's mobile gaming segment experienced a 13.1% year-over-year revenue drop, significantly worse than analyst projections of a negative 2.8% [3] - The slowdown in the gaming segment raises concerns as the company aims to streamline operations and reduce less successful projects [3] Nio (NIO) - Nio is struggling in the competitive Chinese EV market, incurring significant losses each quarter without a clear path to profitability [4] - The stock has declined over 42% year-to-date and more than 34% last year, exacerbated by a broader market slowdown [4] - Nio's five-year average top-line growth is 899%, but its year-over-year growth is only 13%, with a negative 38% net income margin [5] iShares MSCI China ETF (MCHI) - The iShares MSCI China ETF is considered a stock to offload, as current bullishness appears to be unfounded in macroeconomic improvements [6] - MCHI is trading near its 52-week high of $44.97, with a year-to-date gain of almost 14%, but its long-term performance has been lackluster [6] - The ETF has an annualized volatility of 25%, significantly higher than the median for all ETFs, and an expense ratio of approximately 0.6%, which exceeds the median by 23% [6][7]

Investment Rating - Maintains a "Buy" rating with an adjusted target price of $16.8 USD / 131 HKD [3][6][7] Core Views - Revenue in 1Q24 reached RMB 5.67 billion, a 12% YoY increase, surpassing market expectations by 1% [3] - Adjusted net loss narrowed to RMB 440 million, better than the market expectation of RMB 500 million, with a 57% YoY improvement [3] - Adjusted loss margin improved by 12.5 percentage points YoY to 7.8% [3] - Daily active users (DAU) grew 9.3% YoY to 100 million, while monthly active users (MAU) reached 342 million, an 8% YoY increase [3] - Advertising revenue grew 31% YoY in 1Q24, with expectations of maintaining a high growth rate of 27% YoY in 2Q24 [3] - Game revenue declined 13% YoY due to the decline of older games, but is expected to recover with the launch of the new game "Three Kingdoms: Strategic World" on June 13 [3] - Gross margin improved to 28.3% in 1Q24, up 6.5 percentage points YoY and 2.2 percentage points QoQ, driven by the optimization of revenue structure [3] - The company aims to achieve adjusted operating profit breakeven in 3Q24 [3] Financial Forecasts - 2024E revenue is forecasted at RMB 24.94 billion, with 2025E revenue expected to reach RMB 27.35 billion [3][4] - Adjusted net loss for 2024E is projected at RMB 395 million, turning to a profit of RMB 984 million in 2025E [4] - Target P/S ratio for 2024E is 2.0x, with a slight decline to 1.8x in 2025E [4] User Metrics and Advertising - Average daily usage time reached a record high of 105 minutes in 1Q24 [3] - Advertising growth is supported by increased traffic, expanded ad inventory, and improved e-commerce ecosystem [3] Game Business Outlook - Game revenue is expected to return to positive growth in 2Q24 with the launch of the new game "Three Kingdoms: Strategic World" [3] Valuation and Target Price - The target price is based on a 2024E P/S ratio of 2.0x, reflecting confidence in the company's steady traffic growth and improving advertising ecosystem [3][6][7] Industry Context - The report covers the internet industry, with a focus on companies like Bilibili, Tencent, and NetEase, highlighting their performance in gaming and advertising sectors [16]

Investment Rating - The report maintains a "Buy" rating for the company [1] Core Insights - The company reported a strong performance in advertising growth, with a notable focus on the upcoming game "Three Kingdoms: Strategizing the World" set to launch in June [1][2] - The Q1 2024 financial results showed a revenue of 5.7 billion RMB, representing a year-over-year increase of 12% but a quarter-over-quarter decrease of 11% [2] - The adjusted net profit for Q1 2024 was a loss of 440 million RMB, significantly narrowing compared to the previous year [2] Financial Performance - The company's Q1 2024 revenue breakdown includes: - Mobile gaming revenue of 983 million RMB, down 13% year-over-year - Value-added services revenue of 2.529 billion RMB, up 17% year-over-year - Advertising revenue of 1.669 billion RMB, up 31% year-over-year - IP derivatives and other business revenue of 484 million RMB, down 5% year-over-year [4][6] - The overall gross margin improved to 28.3%, an increase of 6.6 percentage points year-over-year [4] - The monthly active users (MAU) grew by 8% year-over-year to 341.5 million, while daily active users (DAU) increased by 9% to 102 million [4][6] Future Projections - Revenue forecasts for FY2024-2026 are projected at 25.9 billion, 29.5 billion, and 33.6 billion RMB respectively, with a non-GAAP net profit forecast of -360 million, 1.57 billion, and 2.41 billion RMB [5][7] - The target price for 2024 is set at 129 RMB or 142 HKD, with a valuation based on MAU and price-to-sales ratios [4][7]

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Insights - The company achieved revenue of 5.7 billion yuan in Q1 2024, representing a year-over-year increase of 12% and a quarter-over-quarter decrease of 11%, with adjusted net loss narrowing to 456 million yuan, a 56% improvement compared to the same period last year [2][3] - The advertising business continues to show strong growth, with Q1 2024 revenue of 1.669 billion yuan, up 31% year-over-year, driven by optimized advertising products and improved efficiency [3] - The gaming business faced temporary pressure with Q1 2024 revenue of 983 million yuan, down 13% year-over-year, primarily due to the absence of new game launches [3] - The gross margin improved to 28.3%, up 6.6 percentage points year-over-year, indicating ongoing cost reduction and efficiency enhancement efforts [3] Summary by Sections Revenue and Profitability - Total revenue for 2024 is projected to be 21.899 billion yuan, with a year-over-year growth of 12% [2] - Non-GAAP net profit is expected to improve significantly from a loss of 4.822 billion yuan in 2023 to a loss of 1.726 billion yuan in 2024, and turning positive in 2025 with a profit of 274 million yuan [2][4] Business Segments - Advertising revenue is expected to continue growing due to seasonal events and improved product integration [3] - The gaming segment is anticipated to recover with new game launches, including "物华弥新" and "三国：谋定天下" [3] Financial Metrics - The company maintains a target of turning adjusted operating profit positive by Q3 2024, supported by improved operational efficiency [3][4] - The projected price-to-sales ratio for 2024 is 1.68, indicating a favorable valuation relative to expected revenue growth [4]

Investment Rating - The report maintains a "Buy" rating for the company [5][3] Core Insights - The company's total revenue for Q1 2024 reached 5.665 billion, representing a year-over-year increase of 11.74% but a quarter-over-quarter decrease of 10.78%. The gross margin for Q1 2024 was 28.3%, up 6.56% year-over-year and 2.20% quarter-over-quarter. Non-GAAP net profit attributable to the parent company was -440 million, a decrease of 57.25% year-over-year and 20.84% quarter-over-quarter, indicating a continued reduction in losses [2][3] - Advertising revenue for Q1 2024 was 1.667 billion, up 31.20% year-over-year but down 13.51% quarter-over-quarter. This segment's revenue share increased from 25% in the same period last year to 29%, driven by user growth and new technology applications [2] - The live streaming and value-added services (VAS) revenue for Q1 2024 was 2.5 billion, reflecting a year-over-year increase of 17.28% but a quarter-over-quarter decrease of 11.49%. The company expects Q2 revenue to reach 2.6 billion, a 15% year-over-year increase and a 5% quarter-over-quarter increase [2][3] Financial Forecasts - The company projects revenues of 25.711 billion, 28.680 billion, and 30.771 billion for the years 2024, 2025, and 2026 respectively. The previous forecasts were slightly adjusted downwards due to lower expectations for derivative products and other business segments [3][9] - The report anticipates that the company's non-GAAP operating profit will turn positive by Q3 2024, with expectations of a significant recovery in profitability in the coming years [3][9] Valuation - The target price for the company's stock is set at 154.08 HKD, based on an adjusted average price-to-sales ratio of 2.3x for comparable companies in 2024 [3][10]

Investment Rating - The report maintains a "Buy" rating for the company [1][4] - The market price is HKD 119.80, with a sector rating of outperforming the market [1] Core Views - The company's revenue for Q1 2024 reached RMB 5.665 billion, a year-on-year increase of 12%, while the adjusted net loss narrowed by 57% to RMB 440 million [4] - Advertising revenue grew significantly, with a 31% year-on-year increase to RMB 1.669 billion, driven by enhanced advertising inventory and algorithm efficiency [4] - The company is set to launch a new mobile game, "Three Kingdoms: Strategize the World," in June, which is expected to boost revenue [4] - Gross margin improved for seven consecutive quarters, reaching 28.3%, up 6.6 percentage points year-on-year [4] Financial Summary - The company’s total market capitalization is approximately HKD 50.47 billion [3] - The average daily trading volume over the past three months is HKD 466.36 million [3] - The number of shares issued is 421.26 million, with 337.55 million shares in circulation [3] Revenue and Profit Forecast - Projected revenue growth rates for the upcoming years are 13% for 2024, 15% for 2025, and 14% for 2026 [5] - Non-GAAP net profit is expected to improve from a loss of RMB 579 million in 2024 to a profit of RMB 1.21 billion in 2025 [5] - The company anticipates achieving profitability in Q3 2024 [4] User Engagement Metrics - Daily active users (DAU) and monthly active users (MAU) reached 102 million and 342 million, respectively, with daily usage time averaging 105 minutes [4] - Video views per day increased by 22% year-on-year, reaching 5 billion [4]

Investment Rating - The report maintains a "Recommended" rating for the company [2] Core Views - The company reported a significant narrowing of losses in Q1 2024, with revenue reaching 5.665 billion yuan, a year-on-year increase of 11.74%. The net profit attributable to shareholders was a loss of 749 million yuan, with an adjusted net loss of 456 million yuan, showing a quarter-on-quarter decrease of 17.98% and a year-on-year decrease of 55.77% [2] - The average daily usage time reached a new high, with active community engagement remaining stable. In Q1 2024, the daily active users reached 102 million (YoY +9%), and monthly active users reached 342 million (YoY +8%), with an average daily usage time of 105 minutes [2] - The value-added services business showed steady operation, while the advertising business continued to grow significantly. In Q1 2024, the revenue from value-added services was 2.529 billion yuan, up 17.28% year-on-year, and advertising revenue was 1.669 billion yuan, up 31.20% year-on-year [2] - The gaming business faced challenges, with mobile game revenue declining by 13.15% year-on-year to 983 million yuan. The company is focusing on the performance of new game launches, with a strategy game set to be released on June 13, 2024 [2] - The company is expected to maintain healthy community growth and diversify its business. Revenue growth rates for 2024-2026 are projected at 11.23%, 13.07%, and 10.35%, reaching 25.059 billion yuan, 28.334 billion yuan, and 31.265 billion yuan respectively [2][3] Financial Summary - For 2024, the company is projected to have a revenue of 25.059 billion yuan, with a growth rate of 11.23%. The net profit is expected to be a loss of 1.925 billion yuan, with a profit growth rate of 60.08% [3][7] - The gross margin is expected to improve from 24.16% in 2023 to 29.77% in 2024, while the net margin is projected to improve from -21.41% to -7.68% [3][7] - The earnings per share (EPS) is projected to improve from -11.67 yuan in 2023 to -4.57 yuan in 2024, with a price-to-earnings (P/E) ratio expected to be 75.13 in 2026 [3][7]

Investment Rating - The report maintains a "Buy" rating for Bilibili (9626.HK) [2] Core Insights - The company reported a significant narrowing of losses in Q1 2024, with total revenue reaching 5.665 billion yuan, a year-on-year increase of 11.74%. The net loss attributable to shareholders was 749 million yuan, with an adjusted net loss of 456 million yuan, showing a quarter-on-quarter decrease of 17.98% and a year-on-year decrease of 55.77% [3] - Daily active users reached a record high of 102 million, with monthly active users at 342 million, reflecting a year-on-year growth of 9% and 8% respectively. The average daily usage time was 105 minutes, indicating strong user engagement and community recognition [3] - The value-added services segment generated revenue of 2.529 billion yuan, up 17.28% year-on-year, while advertising revenue increased by 31.20% to 1.669 billion yuan, driven by new advertising scenarios and the upcoming "618" shopping festival [3] - Mobile gaming revenue declined by 13.15% to 983 million yuan, attributed to the natural decline of older games. A new strategy game is set to launch in June 2024, which is expected to boost mobile gaming revenue [3] - The report suggests that Bilibili is on a growth trajectory, with expected revenue growth rates of 11.23%, 13.07%, and 10.35% for 2024-2026, reaching 25.059 billion yuan, 28.334 billion yuan, and 31.265 billion yuan respectively [3][4] Financial Forecast Summary - Revenue (in million yuan) for 2024E is projected at 25,059, with a growth rate of 11.23% - Net profit (in million yuan) for 2024E is forecasted at -1,925, with a profit growth rate of 60.08% - Gross margin is expected to improve to 29.77% in 2024E, up from 24.16% in 2023A [4][8]