Huachuang Securities·2025-05-25 06:45Investment Rating - The report maintains a "Recommended" rating for Bilibili (BILI), expecting it to outperform the benchmark index by 10%-20% over the next six months [16]. Core Insights - Bilibili's Q1 2025 financial results showed revenue of 7 billion yuan, a year-over-year increase of 24%, aligning with Bloomberg consensus expectations. The gross profit reached 2.54 billion yuan, up 58% year-over-year, with a gross margin of 36.3%, also meeting expectations. The company achieved a NON-GAAP net profit of 362 million yuan, marking a turnaround from losses, exceeding consensus forecasts [1]. - Cost-saving measures contributed to the profit exceeding expectations, with R&D expenses at 840 million yuan, 7% lower than anticipated, and sales expenses at 1.17 billion yuan, 3% below expectations. Overall, total expenses were 4% lower than projected [1]. - The report highlights the upcoming performance of the "Three Kingdoms" anniversary season as a key focus area [1]. Financial Projections - Revenue projections for Bilibili are adjusted to 29.9 billion yuan for 2025, 32.4 billion yuan for 2026, and 34.6 billion yuan for 2027, reflecting year-over-year growth rates of 12%, 8%, and 7% respectively [7]. - The forecast for NON-GAAP net profit is updated to 2.01 billion yuan for 2025, 3.6 billion yuan for 2026, and 4.99 billion yuan for 2027, with significant year-over-year growth rates of 147.8%, 247.1%, and 62.3% respectively [7]. - The target price for Bilibili is set at $21.20, based on a 20x PE ratio for the 2026 NON-GAAP net profit, discounted back to 2025 [7]. Business Segments Performance - Mobile gaming revenue for Q1 2025 was 1.73 billion yuan, a 76% year-over-year increase, driven primarily by the core SLG product "Three Kingdoms: Strategy of the World" [7]. - Advertising revenue reached 2 billion yuan, a 20% year-over-year increase, supported by stable user growth, with DAU at 107 million, MAU at 368 million, and an average user engagement time of 108 minutes [7]. - Value-added services generated 2.8 billion yuan in revenue, an 11% year-over-year increase, driven by live streaming and other services [7].