Core Insights - The ratio of small screen to large screen usage has reached 1:1, indicating a significant presence of large screen users in the entertainment landscape [1] - Despite the perception that television is declining, data shows that large screen viewing is thriving, with platforms like iQIYI and Youku reporting substantial increases in viewing time on large screens [1][3] - The Chinese smart large screen market is expanding, with nearly 1 billion people covered and a steady annual growth rate [1][4] User Demographics - The total number of television users in China remains the highest among all viewing populations, with 1.197 billion television users compared to 1.108 billion internet users [4][7] - Smart TV users are projected to exceed 1 billion by the end of 2025, with a 25% growth rate over the past five years [4][7] - The user base for large screens is diverse, including couples, single young adults, families with children, and older adults, each with distinct viewing preferences [8][10] Viewing Behavior - Large screen users are primarily engaged in watching long-form content, with a significant portion of viewing time dedicated to dramas and movies [12][13] - The viewing habits of different demographics show a preference for quality long content, with single young adults and families particularly active during prime viewing hours [10][11] - The demand for long-form content on large screens remains strong, despite the rise of short video formats [11][15] Market Trends - The sales of smart TVs are on the rise, with an expected increase of 23.59 million units in 2024, driven by government subsidies and consumer demand [7][20] - The content landscape is shifting, with a growing emphasis on high-quality long-form content as the primary draw for large screen users [18][22] - Platforms are adapting to the large screen environment, with strategies that include offering exclusive content and enhancing user experience [20][22] Industry Implications - The resurgence of large screens as a viable platform for long-form content suggests a potential shift in content strategy for streaming services [19][23] - The integration of short-form content into large screen viewing is being explored, but long-form content remains the dominant format [11][15] - The industry must address the operational challenges of large screen platforms to fully capitalize on the growing user base and viewing habits [22][24]

Investment 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, with a year-on-year growth of 8% [7][19]. - The gaming revenue saw a significant year-on-year increase of 76%, primarily due to the success of the game "Three Kingdoms" [7][19]. - Advertising revenue also grew by 20% year-on-year, benefiting from increased traffic and improved marketing efficiency through AI technology [7][19]. 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, 3,298 million RMB in 2026, and 4,145 million RMB in 2027 [3][25]. - The adjusted net profit for 2025 is projected at 2,316 million RMB, with an adjusted earnings per share of 5.47 RMB [3][25]. User Engagement Metrics - The report indicates that the number of paid users reached 32 million, with a stable payment rate [12][14]. - The average daily usage time per user has shown consistent year-on-year growth, contributing to overall user engagement [9][10]. Market Position and Future Outlook - The company is expected to maintain high growth in gaming, with a projected increase of 59% in the second quarter of 2025, driven by upcoming game updates and new releases [7][19]. - The advertising revenue is anticipated to grow by 18% year-on-year, supported by traffic growth and product optimization [7][19]. - The report maintains a positive outlook on the company's content positioning and user value enhancement, which are expected to drive user engagement and commercialization [7][19].