哔哩哔哩-W：广告表现亮眼，游戏业务或将恢复增长

Investment Rating - Maintains a "Buy" rating with an adjusted target price of $16.8 USD / 131 HKD [3][6][7] Core Views - Revenue in 1Q24 reached RMB 5.67 billion, a 12% YoY increase, surpassing market expectations by 1% [3] - Adjusted net loss narrowed to RMB 440 million, better than the market expectation of RMB 500 million, with a 57% YoY improvement [3] - Adjusted loss margin improved by 12.5 percentage points YoY to 7.8% [3] - Daily active users (DAU) grew 9.3% YoY to 100 million, while monthly active users (MAU) reached 342 million, an 8% YoY increase [3] - Advertising revenue grew 31% YoY in 1Q24, with expectations of maintaining a high growth rate of 27% YoY in 2Q24 [3] - Game revenue declined 13% YoY due to the decline of older games, but is expected to recover with the launch of the new game "Three Kingdoms: Strategic World" on June 13 [3] - Gross margin improved to 28.3% in 1Q24, up 6.5 percentage points YoY and 2.2 percentage points QoQ, driven by the optimization of revenue structure [3] - The company aims to achieve adjusted operating profit breakeven in 3Q24 [3] Financial Forecasts - 2024E revenue is forecasted at RMB 24.94 billion, with 2025E revenue expected to reach RMB 27.35 billion [3][4] - Adjusted net loss for 2024E is projected at RMB 395 million, turning to a profit of RMB 984 million in 2025E [4] - Target P/S ratio for 2024E is 2.0x, with a slight decline to 1.8x in 2025E [4] User Metrics and Advertising - Average daily usage time reached a record high of 105 minutes in 1Q24 [3] - Advertising growth is supported by increased traffic, expanded ad inventory, and improved e-commerce ecosystem [3] Game Business Outlook - Game revenue is expected to return to positive growth in 2Q24 with the launch of the new game "Three Kingdoms: Strategic World" [3] Valuation and Target Price - The target price is based on a 2024E P/S ratio of 2.0x, reflecting confidence in the company's steady traffic growth and improving advertising ecosystem [3][6][7] Industry Context - The report covers the internet industry, with a focus on companies like Bilibili, Tencent, and NetEase, highlighting their performance in gaming and advertising sectors [16]