Bilibili (BILI) could be a solid choice for investors given the company's remarkably improving earnings outlook. While the stock has been a strong performer lately, this trend might continue since analysts are still raising their earnings estimates for the company.The upward trend in estimate revisions for this Chinese video sharing website reflects growing optimism of analysts on its earnings prospects, which should get reflected in its stock price. After all, empirical research shows a strong correlation ...

Investment Rating - Maintain "Overweight" rating [1] Core Views - Bilibili's self-published SLG mobile game "Three Kingdoms: Strategic Conquest" (referred to as "Three Kingdoms") has shown strong performance, reaching No 2 on the iOS bestseller list shortly after its S3 season launch on September 21 [1] - The game is expected to become a long-term revenue driver, with iOS revenue estimated at $825 million as of September 22 [1] - Bilibili's 2Q24 total revenue reached RMB 6 13 billion (YoY +16%), with game revenue contributing RMB 1 01 billion (YoY +13%) [1] - Advertising revenue grew 30% YoY to RMB 2 04 billion in 2Q24, driven by e-commerce and digital home appliances sectors [1] - The company is expected to achieve operating profitability in 3Q24, with adjusted operating profit forecasted at RMB 180-200 million [1] Business Performance Game Business - "Three Kingdoms" set a record as Bilibili's fastest game to reach RMB 1 billion in revenue [1] - The game maintained its position as the top-grossing SLG game in China's iOS market since its public launch on June 13 [1] - Bilibili ranked 8th in China's mobile game publisher global revenue ranking in August 2024, up 4 places from the previous month [1] - Future pipeline includes global version of "Jujutsu Kaisen Phantom Parade" with a target of 10 million pre-registrations, scheduled for December 5, 2024 [1] Financial Performance - 2Q24 gross margin improved by 6 8 percentage points to 29 9% [1] - Adjusted operating loss narrowed by 69% YoY to RMB 284 million [1] - Adjusted net loss narrowed by 72% YoY to RMB 271 million [1] - Deferred revenue increased by RMB 738 million from the end of March to June [1] Future Outlook - 3Q24 game revenue is expected to achieve high double-digit growth [1] - Advertising revenue is projected to maintain 25-30% growth in 3Q24 [1] - VAS business is forecasted to grow approximately 10% in 3Q24 [1] - The company is expected to achieve 15-20% operating margin in the medium term [1] Valuation and Forecast - Revenue forecasts for 2024-2026 are maintained at RMB 26 7/29 7/31 9 billion [1] - Net profit forecasts for 2024-2026 are revised to -1 26/0 27/1 66 billion RMB (vs previous -1 48/0 18/1 55 billion) [1]

From a technical perspective, Bilibili (BILI) is looking like an interesting pick, as it just reached a key level of support. BILI recently overtook the 50-day moving average, and this suggests a short-term bullish trend.The 50-day simple moving average is a widely used technical indicator that helps determine support or resistance levels for different types of securities. It's one of three major moving averages, but takes precedent because it's the first sign of an up or down trend.Shares of BILI have been ...

Financial Performance - Total net revenues for Q1 2024 were RMB5.66 billion (US$784.5 million), representing a 12% year-over-year increase[2] - Advertising revenues increased by 31% year-over-year to RMB1.67 billion (US$231.1 million)[2] - Value-added services (VAS) revenues grew by 17% year-over-year to RMB2.53 billion (US$350.3 million)[2] - Gross profit reached RMB1.61 billion (US$222.3 million), a 45% increase year-over-year, with a gross profit margin of 28.3%[3] - Total net revenues for the three months ended March 31, 2024, were RMB 5,664,600, a decrease of 10.8% compared to RMB 6,349,096 for the previous quarter[22] - Gross profit for the same period was RMB 1,605,360, representing a gross margin of approximately 28.3%[22] - The net loss attributable to Bilibili Inc.'s shareholders for the three months ended March 31, 2024, was RMB 748,545, compared to a net loss of RMB 1,296,484 in the previous quarter[22] - The company reported an adjusted net loss of RMB 455,882 for the three months ended March 31, 2024[29] User Engagement - Average daily active users (DAUs) increased by 9% year-over-year to 102.4 million, while monthly active users (MAUs) reached 341.5 million, up 8% year-over-year[4] Operating Expenses - Total operating expenses decreased by 2% year-over-year to RMB2.42 billion (US$335.7 million)[9] - Operating expenses totaled RMB 2,423,956 for the three months ended March 31, 2024, a decrease of 18.1% from RMB 2,964,652 in the previous quarter[22] - Share-based compensation expenses included in total operating expenses were RMB 264,586 for the three months ended March 31, 2024[24] Cash Flow and Assets - Operating cash flow was RMB637.7 million (US$88.3 million), compared to negative RMB630.0 million in the same period last year[3] - Cash and cash equivalents decreased to RMB 6,037,409 as of March 31, 2024, down from RMB 7,191,821 as of December 31, 2023[26] - Total current assets decreased to RMB 16,127,496 as of March 31, 2024, compared to RMB 18,727,039 as of December 31, 2023[26] - Net cash provided by operating activities for the three months ended March 31, 2024, was RMB 637,697, compared to net cash used of RMB 629,977 in the same period last year[27] Mobile Games - Mobile games revenues decreased by 13% year-over-year to RMB982.8 million (US$136.1 million)[7]

Communication Services has been one of the success stories from Wall Street in 2024. As of August 2024, The Communication Services Select Sector SPDR (XLC) had grown 20.8% year to date, trailing only the Financials and Utilities segments.The sector represents companies that provide wired, wireless, satellite, cable, Internet media services, broadcasting and other communication infrastructure, some of the most forward-looking businesses for investors to get their hands on. Also, these companies generally boa ...

| --- | --- | --- | |------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------|--------------------------------------------| | BILI） | | 2024 年 08 月 28 日 | | | 投资评级 | | | 降本增效下亏损收窄，三谋驱动游戏收入同比增长 | 6 | 个月评级 买入（维持评级） | | 发布 2024Q2 财报。24Q2 收入为 61.3 亿元，超彭博一致预期 0.6%。 18.3 亿元，超彭博一致预期 2.9%；毛利率达 29.9%，yoy+6.8pcts。 | 作者 | | | 经调整净亏损为 2.7 亿元，yoy 大幅缩窄 72%。 | 孔蓉 | 分析师 | | | SAC 执业证书编号： | S1110521020002 ...

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 ...

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]

Financial Data and Key Metrics - Total revenues increased by 16% year-over-year to RMB 6.13 billion in Q2 2024 [5] - Gross profit rose by 49% year-over-year to RMB 1.8 billion, with gross profit margin reaching 29.9%, up from 23.1% in Q2 2023 [6] - Adjusted operating loss and adjusted net loss narrowed by 69% and 72% year-over-year, respectively [6] - Operating cash flow reached a record RMB 1.75 billion in Q2 2024 [6] - Deferred revenue balance increased by RMB 738 million from Q1 2024 [6] Business Line Data and Key Metrics - Advertising revenue grew by 30% year-over-year, contributing 33% of total revenue [5][20] - Games revenue increased by 13% year-over-year to RMB 1.01 billion, driven by new launches and legacy titles [15][20] - Value-added services (VAS) revenue grew by 11% year-over-year to RMB 2.57 billion, with premium members reaching 22.3 million [18][20] Market Data and Key Metrics - DAUs increased by 6% year-over-year to 102 million, while MAUs grew to 336 million [7] - Users spent an average of 99 minutes daily on the platform, up from 94 minutes in Q2 2023 [11] - Video views increased by 18% year-over-year to over 4.8 billion daily [9] Company Strategy and Industry Competition - The company focuses on content, community, and commercialization, with a strategy to attract high-quality creators and expand monetization channels [9][10] - The success of the strategy game "San Guo: Mou Ding Tian Xia" marks a breakthrough in genre diversification and long-term game operation [16][17] - The company aims to achieve non-GAAP breakeven in Q3 2024 and improve profitability thereafter [6][21] Management Commentary on Operating Environment and Future Outlook - Management highlighted the strong growth in advertising and games businesses, driven by improved infrastructure and user engagement [12][15] - The company is confident in maintaining above-industry average advertising growth in the second half of 2024 [31] - Management emphasized the potential of AI applications in content creation and user experience enhancement [53][57] Other Important Information - The company celebrated its 15th anniversary, with nearly 70% of China's Gen Z+ population using the platform [8] - Bilibili held offline events "Bilibili World" and "Bilibili Macro Link," attracting over 250,000 participants [11] Q&A Session Summary Question: Drivers behind robust advertising growth and outlook for H2 2024 - Advertising growth was driven by healthy traffic growth and unlocking the commercial value of users, with a focus on infrastructure and vertical industry solutions [25][27][31] Question: Drivers for the successful launch of "San Guo: Mou Ding Tian Xia" and future game genres - The game's success was attributed to the company's strategy of reinventing games for younger audiences, with a focus on long-term operation and addressing user pain points [35][37][39] Question: Content strategy and consumption trends as user demographics evolve - The company is expanding content categories to cater to evolving user needs, with significant growth in consumption-related content such as home decor, automotive, and fashion [43][44][46] Question: Financial outlook for H2 2024 and mid-to-long term profitability - The company expects strong revenue growth in Q3 2024, driven by games and advertising, and aims to achieve meaningful operating profit on a non-GAAP basis [51] Question: AI applications and future potential - AI is being used to enhance content creation and user experience, with significant user engagement in AI-related content and partnerships with leading AI companies [53][57][59]