BILIBILI INC(9626.HK)4Q25 PREVIEW：PROFIT BEAT;DYNAMIC GAME AND SOLID AD IN 2026 WITH ACCELERATED AI ON GROWING USER AND RICHER CONTENT ECOSYSTEMS

Core Viewpoint - The company is expected to achieve a 6% year-on-year revenue growth, driven by a decline in mobile game revenue, an increase in online advertising, and stable value-added services (VAS) [1][3] Financial Performance - Total revenue is projected to grow to RMB8.2 billion, with mobile game revenue declining by 14% year-on-year to RMB1.55 billion, while online ad revenue is expected to rise by 23% year-on-year to RMB2.9 billion [3] - VAS revenue is forecasted to decrease by 5% year-on-year to RMB3.2 billion, while adjusted operating profit is anticipated to reach RMB849 million, resulting in a 10.4% adjusted operating profit margin [3] - The adjusted net profit margin is expected to be 11.2%, surpassing market expectations [3] Growth Drivers - The company is focused on monetizing healthy user growth and enhancing mid-to-long content ecosystems through various channels, including online ads, games, and new VAS initiatives [2] - Strong growth in online advertising is anticipated due to improvements in traffic, ad load, and pricing, supported by advancements in ad technology and AI [2] - Key sectors driving growth include games, eCommerce, automotive, consumer electronics, furniture, and AI-related industries [2] Game Development Outlook - The public launch of the game Ncard is expected in late Q2 2026, following testing after the Chinese New Year [2] - The company plans to continue its procurement for the CCTV Chinese New Year Eve Gala and host major offline events in 2026 [2] - New game pipelines, including "闪耀吧! 噜咪," are set for testing in mid-2026, while existing games like SanMou are stabilizing domestically [2] Valuation - The company maintains a "BUY" rating and raises the target price to US$35.0 / HK$278.0, based on a PEG ratio of 0.9x for 2026E and a projected 34% compound annual growth rate for adjusted net profit from 2025E to 2027E [4] - This valuation implies a price-to-earnings ratio of 29x for FY2026 and 21x for FY2027 [4]