Industry Overview - The Communication Services sector has shown significant growth in 2024, with the Communication Services Select Sector SPDR (XLC) increasing by 20.8% year to date, ranking behind only Financials and Utilities [1] - This sector includes companies involved in wired, wireless, satellite, cable, Internet media services, and broadcasting, characterized by strong fundamentals [1] - Companies in this sector tend to withstand market volatility by cutting costs and maintaining robust balance sheets, especially with anticipated Fed rate cuts starting in September [1] Technological Impact - Communication services companies are a subset of the tech sector, continuously investing in new technologies and innovations, which presents opportunities for price appreciation [2] - The rise of generative artificial intelligence (AI) has driven growth in this sector, with several companies positioned to benefit from its evolution [2] - While the potential for market upside exists, there are concerns about whether the current hype around generative AI may lead to a bubble [2] Stock Recommendations - Bilibili Inc. (BILI) is highlighted for its online entertainment services in China, with an expected earnings growth rate of 100% for the current year and a Zacks Rank of 2 [3] - SES S.A. (SGBAF), engaged in satellite-based data transmission, has an expected earnings growth rate of 12.7% and a Zacks Rank of 2 [4] - Tencent Holdings Limited (TCEHY), a tech company providing various online services, has an expected earnings growth rate of 32% and a Zacks Rank of 2 [4]

Investment Rating - The report assigns a "Buy" rating for Bilibili with a target price of $21.00 USD / 163.77 HKD, indicating a potential upside of 36.61% / 35.01% from the current stock price [2][6][3]. Core Insights - Bilibili's Q2 revenue reached 6.13 billion RMB, a year-on-year increase of 15.5%, slightly above market expectations. The gross margin improved to 29.9%, up 6.8 percentage points, primarily driven by the growth in high-margin advertising and gaming businesses [2][4]. - The company expects to achieve Non-GAAP operating profit in Q3, with revenue projected to grow by 22.4% year-on-year to 7.1 billion RMB, and gross margin expected to increase to 35% [2][4]. - The advertising business is benefiting from increased demand in gaming and e-commerce, with annual advertising revenue expected to grow by 24% [2][4]. - User metrics show steady growth, with DAU increasing by 5.2% to 100 million and MAU growing by 3.7% to 340 million [2][4]. - The gaming segment is projected to generate significant revenue, with expectations of 2.5 billion RMB in 2024 and 5 billion RMB in 2025 from the game "Three Kingdoms" [2][4]. Financial Summary - Total revenue for the fiscal year ending December 31 is forecasted to grow from 22.53 billion RMB in 2023 to 31.25 billion RMB by 2026, reflecting a compound annual growth rate (CAGR) of 17.8% [4][5]. - The net profit is expected to improve from a loss of 1.3 billion RMB in 2024 to a profit of 1.58 billion RMB in 2026, with net profit margins turning positive by 2025 [4][5]. - The gross margin is projected to increase significantly from 24.2% in 2023 to 34.6% by 2026, indicating improved operational efficiency [4][5]. Market Position - Bilibili's market capitalization stands at $6.365 billion USD, with major shareholders including Chen Rui at 12% [3][4]. - The stock has a 52-week high of $18.19 and a low of $8.80, indicating volatility in its market performance [3][4].

| --- | --- | --- | |-------------------------------------------------------------------------------------|-------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | | | | | 24Q2 | | 点评：三谋助力游戏业务重回正增长， 24Q3 有望实现 NON-GAAP OP 盈利 | | 投资评级：买入 ( | 维持） | 主要观点： | | [Table_Rank] 报告日期： 2024-08-28 | | ⚫ 事件： | | [T ...

游戏收入超预期增长，盈利可期 ——哔哩哔哩（9626.HK）24Q2 点评 核心观点 ⚫ 总收入：24Q2 达 61.27 亿（yoy+16%，qoq+8.17%），广告和增值业务驱动公司 主要增长。24Q2 毛利率达 29.9%（yoy+6.78pp，qoq+1.58pp）。24Q2 销售费用 为 10.4 亿（yoy+12.79%，qoq+11.71%），管理费用为 4.9 亿（yoy-9.57%，qoq8.22%），研发费用为 8.9 亿（yoy-14.57%，qoq-7.30%）。24Q2Non-gaap 归母 净利润达-2.7 亿（yoy-71.79%，qoq-38.26%），实现持续减亏。24Q2Non-gaap 营业利润为-2.8 亿，我们预期 24Q3non-gaap 营业利润达 2 亿，首次转正。 ⚫ 广告: 24Q2 达 20.4 亿（yoy+29.54%,qoq+22.11%）。广告收入占整体收入比例由 去年同期 30%提升至 33%，有效带动公司毛利润的提升。供给端： DAU 稳定增长 叠加商业化产品的持续整合，促使变现效率不断提高。需求端：随着 B 站用户成 熟，消费能力快速释放。电 ...

Investment Rating - The investment rating for the company is maintained at "Buy" [3][2]. Core Insights - The company reported a revenue of 6.13 billion yuan for Q2 2024, exceeding Bloomberg's consensus estimate by 0.6% [1]. - Gross profit reached 1.83 billion yuan, surpassing Bloomberg's consensus estimate by 2.9%, with a gross margin of 29.9%, an increase of 6.8 percentage points year-over-year [1]. - Adjusted net loss narrowed significantly to 270 million yuan, a year-over-year reduction of 72% [1]. User and Creator Metrics - Daily Active Users (DAU) exceeded 102 million, up 6% year-over-year, while Monthly Active Users (MAU) reached 336 million [1]. - The average daily usage time per user was 99 minutes [1]. - The number of creators earning income through the platform increased by 34% year-over-year, with those earning through video and live streaming sales rising by 76% [1]. Business Segment Performance - **Gaming**: Revenue for the gaming segment was 1.01 billion yuan, exceeding Bloomberg's estimate by 5.5%, and grew 13% year-over-year, driven by the exclusive strategy game "Three Kingdoms: Strategy" [1][2]. - **Advertising**: Advertising revenue reached 2.04 billion yuan, surpassing Bloomberg's estimate by 2.0%, with a year-over-year increase of 30%, attributed to improved advertising efficiency and product optimization [1]. - **VAS (Value-Added Services)**: Revenue was 2.57 billion yuan, below Bloomberg's estimate by 3.1%, but still grew 11% year-over-year, supported by an increase in paid users for premium services [1]. - **IP and Derivatives**: Revenue was 520 million yuan, slightly below Bloomberg's estimate by 5.4%, with a year-over-year decline of 4% [1]. Cost Structure and Profitability - Operating costs were 4.29 billion yuan, with revenue-sharing costs accounting for 2.49 billion yuan [1]. - The company achieved a gross margin of 29.9%, an increase of 6.8 percentage points year-over-year [1]. - General and administrative expenses decreased by 10%, while R&D expenses fell by 15% year-over-year [1]. - Operating loss was 590 million yuan, a year-over-year reduction of 54% [1].

交银国际研究 公司更新 | --- | --- | --- | |------------|-------------|----------| | 收盘价 | 目标价 | 潜在涨幅 | | 美元 12.96 | 美元 19.00↓ | +46.6% | 哔哩哔哩 (BILI US) 新游拉动游戏收入加速增长，3 季度运营层面有望实现盈利 2 季度亏损收窄好于预期。哔哩哔哩 2024 年 2 季度收入为 61 亿元人民币 （下同），同/环比增16%/8%，基本符合预期。调整后净亏损为2.7亿元， 同/环比收窄 72%/38%，好于我们预期的 3.3 亿元亏损，主要受益于收入结 构改善带动毛利率提升（同/环比+6.8/1.6 个百分点）以及运营费用率优化 （同环比收窄 7.8/3.3 个百分点）。 广告收入维持快于行业增长。2 季度广告收入同比增 30%，仍受益于：1） 流量增长（总时长/日均视频播放量同比+11%/18%）；2）基建及垂直行业 解决方案优化带动广告主数量增长（上半年，效果 KA 广告主数量同比 +50%）及投放效率提升，电商/数码家电投放增量领先。3）交易带动广告 投放，2 季度，观看交易内容的 ...

Investment Rating - The report maintains a "Buy" rating for Bilibili [2][3] Core Views - Bilibili's revenue shows steady growth with a significant improvement in gross margin, driven by an increase in high-margin advertising business [1] - The company aims to achieve non-GAAP breakeven in Q3 2024 and continue enhancing profitability thereafter [1] - User engagement remains strong, with a daily active user (DAU) growth of 6% year-on-year, reaching 102 million [1] - Advertising revenue is expected to grow, with a 29.5% year-on-year increase in Q2 2024, supported by improved advertising products and efficiency [1] - The gaming segment remains stable, with the new game "Three Strategies" performing exceptionally well, achieving over 100 million in revenue within its first week [1] Financial Summary - For 2024, Bilibili's projected revenue is 25.998 billion, with a year-on-year growth of 15.4% [5][10] - Non-GAAP net profit is expected to improve from a loss of 6.692 billion in 2022 to a loss of 232 million in 2024, with a significant turnaround anticipated in 2025 [5][10] - The gross margin is projected to increase from 24.2% in 2023 to 32.2% in 2024, reflecting improved operational efficiency [10] - The company expects to maintain a user retention rate of 80% for its formal membership, indicating strong user loyalty [1]

Core Viewpoint - Bilibili Inc. is upgraded from a Hold to a Buy rating due to expected positive earnings in Q3 2024 and significant revenue growth acceleration for the full year [1] Financial Performance - Bilibili's Q2 2024 revenue grew by +16% YoY, reaching RMB6,127 million, which was +1% higher than the consensus estimate of RMB6,090 million [3] - The mobile games business revenue increased by +13% YoY to RMB1,007 million in Q2 2024, a significant turnaround from a -13.1% YoY contraction in Q1 2024 [3] - The normalized net loss per share improved from -RMB2.33 in Q2 2023 and -RMB1.06 in Q1 2024 to -RMB0.65 in Q2 2024, better than the consensus forecast of -RMB0.75 [3] - Advertising revenue grew by +30% YoY to RMB2,038 million, increasing its proportion of total revenue from 30% in Q2 2023 to 33% in Q2 2024 [3] - Gross margin expanded by +6.8 percentage points YoY to 29.9% in Q2 2024, while operating expenses as a percentage of sales improved from 47% in Q2 2023 to 39% [3] Growth Prospects - Bilibili's deferred revenue balance increased by +25% QoQ to RMB3,725 million as of end-Q2 2024, indicating strong future top-line performance [4] - The new game "San Guo: Mou Ding Tian Xia" (San Mou) has returned to the Top 3 on the iOS game grossing chart, suggesting positive momentum for the mobile games business [4] - The number of advertisers expanded by over +50% YoY for 1H 2024, with expectations for above-industry average advertising growth in 2H 2024 [5] - Revenue growth in RMB terms is projected to improve from +3% in the previous year to +18% for the current year [5] Valuation - Bilibili's PEG (Price-to-Earnings Growth) valuation metric is attractive at 0.43 times, based on a consensus FY 2025-2028 normalized EPS CAGR forecast of +61% and a consensus FY 2025 normalized P/E multiple of 26 times [7]

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Insights - The company reported Q2 2024 revenue of 6.127 billion yuan, a year-over-year increase of 16% and a quarter-over-quarter increase of 8%, exceeding Bloomberg consensus expectations of 6.093 billion yuan [3] - Non-GAAP net loss for Q2 2024 was 271 million yuan, better than the expected loss of 329 million yuan, and significantly improved from losses of 964 million yuan and 456 million yuan in Q2 2023 and Q1 2024 respectively [3] - The advertising business showed strong growth, with Q2 2024 revenue of 2.037 billion yuan, up 30% year-over-year and 22% quarter-over-quarter, benefiting from strong e-commerce platform spending during the 618 shopping festival [3] - The gaming business also exceeded expectations, with Q2 2024 revenue of 1.007 billion yuan, a 13% year-over-year increase, driven by the successful launch of the game "Three Kingdoms: Strategy" [3] - The company expects to turn adjusted operating profit positive in Q3 2024, supported by improved gross margin and effective cost control [3] Summary by Sections Revenue and Profit Forecast - Total revenue forecast for 2024-2026 is adjusted to 26.3 billion, 30.2 billion, and 32.1 billion yuan respectively, with Non-GAAP net profit forecasted at -1.07 billion, 1.899 billion, and 2.785 billion yuan [3] - The company anticipates a Non-GAAP PE of 24 and 16 times for 2025 and 2026 respectively based on current stock price [3] Financial Metrics - Q2 2024 gross margin was 29.9%, an increase of 6.8 percentage points year-over-year, marking the eighth consecutive quarter of improvement [3] - The company’s operating expenses as a percentage of revenue showed a decrease in management and R&D costs, while sales expenses increased due to promotional activities for new game launches [3] Market Data - The closing price of the stock is $14.94, with a market capitalization of approximately $6.294 billion [4] - The stock has a price-to-book ratio of 3.30 and a one-year price range of $8.80 to $18.19 [4]

Investment Rating - The report maintains a "Buy" rating for Bilibili (09626) [3][4] Core Insights - Bilibili's Q2 2024 revenue reached 6.13 billion CNY, a year-on-year increase of 16%, slightly exceeding consensus expectations, with a narrowing adjusted net loss of 270 million CNY [3][4] - The company reported a net operating cash flow of 1.75 billion CNY, an increase of 1.11 billion CNY from Q1 [3] - Deferred revenue as of June 30 was 3.7 billion CNY, up 740 million CNY from March, indicating certainty in future revenue growth [3] User Engagement - Bilibili's Q2 Monthly Active Users (MAU) stood at 336 million, a year-on-year increase of 4%, with Daily Active Users (DAU) at 102 million, up 6% [4] - The DAU/MAU ratio improved to 30.4%, and average daily usage time per user increased by 5 minutes to 99 minutes [4] Financial Projections - The adjusted net profit forecasts for 2024-2026 have been revised to -45 million CNY, 1.512 billion CNY, and 3.067 billion CNY respectively, up from previous estimates of -415 million CNY, 1.028 billion CNY, and 1.882 billion CNY [4] - Revenue projections for 2024-2026 are set at 26.537 billion CNY, 31.046 billion CNY, and 33.278 billion CNY, reflecting growth rates of 18%, 17%, and 7% respectively [5] Gaming Performance - Q2 gaming revenue was 1 billion CNY, a year-on-year increase of 13%, exceeding expectations [6] - The performance of the game "Three Kingdoms: Strategy" is expected to significantly contribute to revenue in H2 2024 [6] Advertising Growth - Q2 advertising revenue reached 2 billion CNY, a historical high with a year-on-year growth of 30% [6] - Growth was driven by improvements in e-commerce advertising and enhanced efficiency from AI [6] Value-Added Services - Revenue from value-added services in Q2 was 2.6 billion CNY, a year-on-year increase of 11%, slightly below expectations [6] - Revenue from IP derivatives and other services was 500 million CNY, down 4% year-on-year [6] Profitability Improvement - Q2 gross margin was 29.9%, an increase of 6.8 percentage points year-on-year and 1.6 percentage points quarter-on-quarter [6] - The company has achieved eight consecutive quarters of gross margin improvement, with effective cost control in G&A and R&D expenses [6]