BILIBILI(HK:09626) GF SECURITIES·2024-08-09 10:01Investment Rating - The report assigns a "Buy" rating for the company, with a target price of $24.71 per ADS and HKD 192.56 per share [1][5][9]. Core Insights - The company is expected to achieve total revenue of RMB 61.31 billion in Q2 2024, representing a year-over-year growth of 16% and a quarter-over-quarter growth of 8%. This growth is driven by strong performance in advertising and gaming sectors [1][5]. - The gross margin is projected to reach 29.6% in Q2 2024, an increase of 6 percentage points year-over-year and 1 percentage point quarter-over-quarter [1][5]. - The launch of the game "Three Kingdoms: Strategy" has positively impacted gaming performance, with expectations for significant contributions to revenue in the second half of 2024 and into 2025 [3][5][9]. Revenue Forecast - The company anticipates total revenue growth of 20% in 2024 and 16% in 2025, reaching RMB 270 billion and RMB 312 billion, respectively [5][9]. - Advertising revenue is expected to grow by 30% in 2024 and 23% in 2025, while live streaming and value-added services (VAS) are projected to grow by 15% in both years [6][9]. - Gaming revenue is forecasted to increase by 33% in 2024 and 9% in 2025, driven by new game launches and sustained user engagement [6][9]. Profitability Outlook - The adjusted net loss for Q2 2024 is expected to be RMB 3.4 billion, with a continuous narrowing of losses compared to previous quarters [1][5]. - The report predicts that the company's gross margin will improve to 31% in 2024 and 33% in 2025, reflecting a shift towards higher-margin revenue streams [9]. - Non-GAAP net profit is projected to reach RMB -622 million in 2024 and RMB 1.549 billion in 2025, indicating a path towards profitability [9].