Investment Rating - The report maintains a "Buy" rating for the company [4][6]. Core Views - The company is expected to generate revenue of 7.63 billion RMB in Q4 2024, representing a year-over-year growth of 20%. The revenue breakdown includes gaming at 1.79 billion RMB (yoy +78%), VAS at 3.00 billion RMB (yoy +5%), advertising at 2.36 billion RMB (yoy +23%), and e-commerce at 480 million RMB (yoy -15%) [1]. - The gross profit for Q4 2024 is projected to be 2.74 billion RMB, with a gross margin of 35.9%, and an adjusted net profit of 410 million RMB [1]. Summary by Sections Gaming Business - The new season of the game "Three Strategies" started on January 4, 2025, with new characters and gameplay features. The game ranked in the top five on the iOS revenue chart shortly after the season launch [2]. - The company has successfully launched the global version of "Jujutsu Kaisen," achieving significant download and revenue milestones, with expected overseas revenue nearing 80 million RMB within 30 days of launch [2]. - The gaming pipeline for 2025 includes the overseas version of "Three Strategies" and the domestic launch of "Jujutsu Kaisen" once it receives approval [2]. Advertising Business - The company is enhancing its commercial infrastructure, focusing on brand marketing and expanding into TV and automotive platforms. The introduction of "B Mini Programs" is aimed at improving advertising efficiency [3]. - The number of advertising partners is expected to grow by over 30% in 2024, with significant growth in GMV during promotional events [3]. - The company is committed to producing high-quality content, with a notable increase in viewership for its New Year's Eve gala and securing broadcasting rights for the 2025 Spring Festival Gala [3]. Financial Forecast and Valuation - The company is projected to have a revenue of 26.73 billion RMB in 2024, with a growth rate of 18.6%. The adjusted net profit is expected to improve to -90 million RMB in 2024, with a positive outlook for 2025 and 2026 [5][12]. - The report indicates a strong user engagement and potential for monetization in the C-end market, with a slight upward revision of the 2024 net profit forecast to -1.35 billion RMB [4][5].

Investment Rating - The report maintains a "Buy" rating for the company, Bilibili (BILI US), with a target price adjusted to $24.00, reflecting a potential upside of 40.8% from the current price of $17.05 [1][2][12]. Core Insights - The report highlights that the gaming revenue is in line with expectations and expresses optimism about the potential for profit release. The company has achieved profitability, leading to a switch to PEG valuation based on comparable entertainment and gaming companies [1][6]. - The adjusted net profit forecast for 2025 has been slightly reduced by 3% to RMB 1.87 billion, while the revenue growth for 2025 is expected to be 19% for advertising and 9% for gaming [6][9]. - The report emphasizes the importance of revenue structure optimization and ongoing cost control to enhance profitability over the long term [6][9]. Financial Forecasts - The revenue projections for 2024E, 2025E, and 2026E are RMB 26,716 million, RMB 29,688 million, and RMB 31,936 million respectively, with a compound annual growth rate (CAGR) of 43% for adjusted net profit from 2025 to 2027 [5][14]. - The report anticipates a gross margin of 36% for Q4 2024, with adjusted operating profit expected to reach RMB 4 billion [6][9]. - The company’s market capitalization is approximately $5.55 billion, with a 52-week high of $29.66 and a low of $8.94 [4][12]. Revenue Breakdown - The revenue breakdown for Q4 2024E includes mobile games at RMB 1,768 million, value-added services (VAS) at RMB 2,989 million, and advertising revenue at RMB 2,389 million, reflecting a year-on-year growth of 24% for advertising [9][14]. - The report notes that the gaming segment is expected to contribute significantly to revenue, with a projected increase in revenue from games in 2025 [6][9]. Market Position - Bilibili is positioned favorably within the entertainment content sector, with a competitive edge in gaming and advertising, supported by product optimization and marketing strategies [1][6][12]. - The report suggests that the stock price has limited downside potential, reinforcing the "Buy" rating based on the company's growth prospects and market dynamics [1][12].

Market Strategy - US investors seeking "growth at a reasonable price" have two options: investing in struggling companies with turnaround potential or looking for better deals overseas [1] Analyst Background - Gary Alexander has extensive experience covering technology companies on Wall Street and working in Silicon Valley [2] - He serves as an outside adviser to several seed-round startups and has deep exposure to industry-shaping themes [2] - His articles are widely syndicated, appearing on platforms like Robinhood and various web publications [2]

Core Insights - The Matchless Kungfu, an open-world sandbox martial arts game inspired by Chinese culture, is currently available at a 25% discount during the Steam Winter Sale, priced at $14.99 instead of the regular $19.99 [1] - Developed by HuanMos Game and published by Bilibili HK Limited, the game allows players to create their own martial arts hero and explore a vast, dynamic world with no predefined roles [2] - Since its release on November 5, 2024, The Matchless Kungfu has quickly become one of Steam's top-selling early access games, maintaining an 85% Very Positive rating from players [3] Gameplay Features - The game incorporates the mystical art of Qinggong, allowing players to run across water and scale cliffs, enhancing the sense of freedom in gameplay [4] - A unique combat system features five basic attacks and special moves, alongside a "verbal combat" system that adds strategic depth to encounters [4] - The homestead system enables players to build various structures, interact with NPCs, and create a thriving environment that evolves based on player actions [5] Community and Accessibility - The release of version 1.0 was supported by community feedback, and the game now includes Russian and German translations to reach a broader audience [6] - Players can engage with the community through Discord and follow updates on social media platforms, enhancing player interaction and experience [7] Company Background - Bilibili Games, a subsidiary of Bilibili Inc., focuses on delivering interactive gaming experiences and has a diverse portfolio that includes popular mobile games and indie titles [8]

Core Insights - Bilibili (BILI) shares have surged 59.2% year to date, outperforming the Zacks Computer & Technology sector and the Zacks Internet - Services industry [1] - The strong performance is attributed to robust mobile game revenues, creator monetization, and high user engagement metrics [2] Financial Performance - The Zacks Consensus Estimate for fourth-quarter revenues is $1.07 billion, indicating a year-over-year growth of 21.35% [3] - The consensus estimate for earnings is 19 cents per share, unchanged over the past 30 days [3] - For 2024, the revenue estimate is $3.71 billion, reflecting a year-over-year growth of 16.89%, with earnings pegged at 5 cents per share [3] Earnings Surprises - BILI shares have beaten the Zacks Consensus Estimate in two of the last four quarters, with an average negative surprise of 4.25% [4] Growth Drivers - Mobile game revenues increased by 83.8% year over year in Q3 2024, driven by a strong game portfolio [6] - Notable titles include San Guo: Mou Ding Tian Xia, which quickly grossed RMB 1 billion ($138 million) [6] - New game launches and updates are expected to expand the player base and drive revenue growth [7] User Engagement - The average daily time spent per user reached 106 minutes, with daily video views exceeding 5.7 billion, up 23% year over year [8] - The monetization of the creator ecosystem through initiatives like fan charging is enhancing income growth for creators [8] Investment Outlook - BILI is positioned for solid growth prospects due to strong mobile gaming revenues, user engagement, and creator monetization [9] - The company currently holds a Zacks Rank 2 (Buy) and a Growth Score of B, indicating a favorable investment opportunity [9]

Core Viewpoint - Bilibili Inc. has successfully completed a repurchase right offer for its 0.50% Convertible Senior Notes due 2026, with a total principal amount of US$419,107,000 being validly surrendered [1] Company Overview - Bilibili is a leading video community in China, targeting young generations with a mission to enrich their everyday lives through diverse video content [3] - The company is known for its "bullet chatting" feature, enhancing user engagement by allowing real-time comments during video viewing [3] - Bilibili aims to promote Chinese culture globally while fostering a strong community among its users and content creators [3]

Core Insights - Persistent earnings growth is crucial for company profitability and stock price appreciation, with studies indicating that successful stocks often experience earnings acceleration prior to stock price increases [1] - Earnings acceleration is defined as the incremental growth in a company's earnings per share (EPS), specifically when quarter-over-quarter growth rates increase over time [2] - Companies with increasing earnings growth percentages are fundamentally sound, while stagnant or declining growth can lead to price drops [4] Earnings Acceleration Screening - The screening parameters for identifying stocks with earnings acceleration include ensuring that the last two quarter-over-quarter EPS growth rates exceed previous periods' growth rates, and projected EPS growth rates for the upcoming quarter are expected to surpass prior periods [5][6][7] - Additional screening criteria include a current stock price of at least $5 and an average 20-day trading volume of 50,000 or more, indicating adequate liquidity [8] Highlighted Companies - **Bilibili Inc. (BILI)**: An online entertainment platform in China, with an expected earnings growth rate of 104.3% for the current year and a Zacks Rank of 2 (Buy) [9] - **BrightSphere Investment Group Inc. (BSIG)**: A diversified multi-boutique asset management company, expected earnings growth rate of 45.5% for the current year, holding a Zacks Rank of 1 (Strong Buy) [10] - **Orchid Island Capital, Inc. (ORC)**: A specialty finance company investing in residential mortgage-backed securities, with an expected earnings growth rate of nearly 74% for the current year and a Zacks Rank of 2 (Buy) [11]

Investment Rating - The report maintains a "Buy" rating for Bilibili (BILI.O) with a current price of $18.83 [2] Core Insights - Bilibili's game "Three Kingdoms: Strategy" (referred to as "S4") has had a strong start, achieving its first quarterly profit in Q3 2024 with total revenue of 73.06 billion yuan, a year-over-year increase of 26% [1] - The company is focusing on enhancing its advertising revenue, which reached 20.94 billion yuan in Q3, up 28% year-over-year, driven primarily by performance advertising [1] - The user engagement metrics are at an all-time high, with daily active users reaching 107 million and monthly active users at 348 million [1] Summary by Sections Financial Performance - Q3 2024 total revenue was 73.06 billion yuan, with game revenue at 18.23 billion yuan (up 84% year-over-year) and advertising revenue at 20.94 billion yuan (up 28% year-over-year) [1] - The adjusted net profit for Q3 was 2.36 billion yuan, marking the company's first quarterly profit since going public [1] - The gross margin improved by 9.9 percentage points to 34.9% due to an optimized revenue structure [1] User Engagement - Daily active users reached 107 million, and monthly active users reached 348 million, both setting new records [1] - The average daily usage time per user increased to 106 minutes, a 6-minute increase year-over-year [1] - The number of creators earning income from the platform reached 2.7 million, with total creator income growing by 24% [1] Future Outlook - The company has slightly adjusted its 2024 net profit forecast to -1.36 billion yuan, while increasing the forecasts for 2025 and 2026 to 4.1 billion yuan and 19.7 billion yuan, respectively [1] - Bilibili plans to continue exploring new game genres and enhance its advertising infrastructure, integrating AI technology to improve efficiency [1]

Investment Rating - The report maintains a "Buy" rating for Bilibili, with an expected price increase of over 20% within the next six months [1]. Core Insights - Bilibili achieved its first positive adjusted net profit, driven by strong growth in game revenue from the game "Three Kingdoms: Strategy" [1]. - The company's Q3 2024 revenue reached 73.1 billion yuan, exceeding Bloomberg's consensus estimate by 2.3% [1]. - Adjusted net profit for the quarter was 2.4 billion yuan, surpassing Bloomberg's consensus estimate by 2.9%, with a gross margin of 34.9%, also above expectations [1]. Revenue Breakdown - **Mobile Games**: Revenue was 18.2 billion yuan, exceeding Bloomberg's estimate by 9.8%, with a year-over-year growth of 84%, primarily driven by the performance of "Three Kingdoms: Strategy" [1]. - **Advertising**: Revenue reached 20.9 billion yuan, slightly above expectations by 0.3%, with a year-over-year increase of 28%, attributed to improved advertising products and efficiency [1]. - **Value-Added Services (VAS)**: Revenue was 28.2 billion yuan, below expectations by 1.2%, with a year-over-year growth of 9% [1]. - **IP and Derivatives**: Revenue was 5.7 billion yuan, exceeding expectations by 7.8%, but showed a year-over-year decline of 2% [1]. Profitability - Adjusted net profit was 2.4 billion yuan, marking a significant improvement from previous losses, with a gross margin increase of 9.9 percentage points year-over-year [1]. - Operating costs were 47.6 billion yuan, with revenue-sharing costs accounting for 29.1 billion yuan [1]. Future Outlook - The report suggests that Bilibili's cost reduction and efficiency improvements are significant, and the company is expected to benefit from its strategy of developing high-quality self-researched games for global distribution [1]. - Revenue forecasts for FY24E-FY26E are projected at -1.3 billion, 20.6 billion, and 38.6 billion yuan respectively [1].

Core Insights - Bilibili (BILI) reported third-quarter 2024 non-GAAP earnings of 8 cents per share, missing the Zacks Consensus Estimate by 20%, while revenues increased to $1.02 billion, surpassing the estimate by 0.76% [1] - The company's shares have appreciated 52.8% year to date, outperforming the Zacks Computer & Technology sector, which returned 29.3% [2] Revenue Breakdown - Revenues from mobile games, accounting for 24.9% of total revenues, increased 83.8% year over year to RMB 1.82 billion [3] - Value Added Services (VAS) revenues, making up 38.6% of total revenues, increased 8.7% year over year to RMB 2.82 billion [3] - Advertising revenues, which represent 28.7% of total revenues, increased 27.8% year over year to RMB 2.09 billion [3] - Revenues from IP Derivatives and others, comprising 7.8% of total revenues, decreased 2.2% year over year to RMB 567.31 million [3] Operating Performance - The gross profit margin improved to 34.9% from 25% in the year-ago quarter [4] - Research and development (R&D) expenses decreased 15% year over year to RMB 906.1 million, representing 12.4% of sales, a decrease of 600 basis points [4] - Sales & Marketing (S&M) expenses increased 21.2% year over year to RMB 1.2 billion, accounting for 16.5% of sales, a decrease of 60 basis points [4] - General & Administrative (G&A) expenses increased 1.3% year over year to RMB 505.4 million, representing 6.9% of sales, a decrease of 170 basis points [5] - Total operating expenses were RMB 2.61 billion, up 2.2% from the year-ago quarter, with a non-GAAP loss from operations of RMB 272.2 million, improved from RMB 755.4 million in the prior year [5] Financial Position - As of September 30, 2024, cash and cash equivalents totaled RMB 11.7 billion, up from RMB 8.76 billion as of June 30, 2024 [6] - Total debt decreased to RMB 5.02 billion from RMB 5.58 billion as of June 30, 2024 [6] - Cash flow from operating activities was RMB 2.23 billion for the reported quarter, significantly up from RMB 277.4 million in the prior quarter [7] Market Position - BILI currently holds a Zacks Rank 2 (Buy) [8] - Other top-ranked stocks in the sector include Tuya (TUYA), NVIDIA (NVDA), and NetApp (NTAP) [8]