BOCOM International·2025-05-21 08:23Investment Rating - The report assigns a "Buy" rating for the company Bilibili (BILI US) with a target price of $26.00, indicating a potential upside of 43.3% from the current price of $18.15 [4][24]. Core Insights - The first quarter profits exceeded expectations, driven by growth in gaming and advertising, with a revenue of 7 billion RMB, representing a year-on-year increase of 24% [2][7]. - The report highlights that the company's monthly active users (MAU) increased by 28 million quarter-on-quarter, benefiting from collaborations such as the Spring Festival Gala [7]. - The gaming revenue saw a significant year-on-year increase of 76%, primarily due to the performance of the game "Three Kingdoms" [7]. - Advertising revenue also grew by 20% year-on-year, outpacing industry growth, supported by increased traffic and improved marketing efficiency through AI technology [7]. Financial Overview - Revenue projections for the company are as follows: - 2023: 22,528 million RMB - 2024: 26,832 million RMB - 2025E: 30,321 million RMB - 2026E: 32,245 million RMB - 2027E: 34,465 million RMB - The net profit is expected to turn positive in 2025, with estimates of 2,316 million RMB, growing to 4,145 million RMB by 2027 [3][25]. - The adjusted net profit for 2025 is projected at 363 million RMB, with a significant increase in earnings per share (EPS) from -0.05 RMB in 2024 to 5.47 RMB in 2025 [3][25]. User Engagement Metrics - The report indicates that the number of paid users reached 32 million, with a consistent growth in user engagement metrics [12][14]. - The average daily usage time per user has shown a year-on-year increase, reflecting the platform's growing engagement [9][10]. Valuation and Future Outlook - The report maintains the revenue and profit expectations for 2025, with a projected compound annual growth rate (CAGR) of 34% for adjusted net profit from 2025 to 2027 [7][19]. - The valuation is based on a PEG ratio of 1x for comparable entertainment and gaming companies, supporting the target price of $26.00 [7][19].