Core Insights - Bilibili (NASDAQ: BILI, HKEX: 9626) reported a total revenue of 7.69 billion RMB for Q3 2025, marking a 5% year-on-year increase, with adjusted net profit soaring 233% to 790 million RMB [2] - The platform experienced accelerated community growth, achieving record highs in multiple metrics, including daily active users of 117 million, a 9% increase year-on-year, and monthly active users of 376 million, an 8% increase [2] Revenue Breakdown - Advertising revenue increased by 23% year-on-year to 2.57 billion RMB (361 million USD), driven by improved ad product supply and effectiveness [3] - Revenue contributions from various segments include: value-added services (39%), advertising (33%), games (20%), and IP derivatives and other businesses (8%) [3] Advertising Growth Drivers - Key factors for the increase in advertising revenue include the integration of e-commerce data pathways, enhanced ad efficiency through upgraded algorithms and AI technology, and partnerships with Alibaba and JD.com [4] - The average age of core consumers has reached around 26 years, entering high spending decision-making stages, which has significantly improved ad efficiency [4] - The user base remains strong, with 117 million daily active users and 376 million monthly active users, contributing to better ad reach and effectiveness [4] Gaming Revenue Decline - Mobile game revenue for Q3 2025 was 1.51 billion RMB (212 million USD), a 17% decrease year-on-year, primarily due to high performance in the previous year from the exclusive game "Three Kingdoms: Strategy of the World" [5] - The decline is attributed to the short lifecycle of popular games and Bilibili's limited investment in self-developed games, leading to reliance on external licensed products [5] Game Development Strategy - Bilibili continues to operate long-term strategies for games like "Fate/Grand Order" and "Azur Lane," while "Three Kingdoms: Strategy of the World" remains a key focus for long-term health and player experience [6] - The newly released self-developed game "Escape from Duckkov" has sold over 3 million copies globally within a month, indicating potential for future success [6] Value-Added Services Performance - Value-added services revenue reached 3.02 billion RMB (425 million USD) in Q3 2025, a 7% increase year-on-year, driven by growth in paid memberships and other services [7] - As of Q3 2025, Bilibili had 25.4 million premium members, with approximately 80% being annual or auto-renewal subscribers [7]

Investment Rating - The report maintains a "Buy" rating for the company [1] Core Insights - The company has demonstrated strong growth in advertising revenue, with a year-on-year increase of 23% in Q3 2025, reaching 25.7 billion yuan [8] - The adjusted net profit for Q3 2025 was 7.86 billion yuan, reflecting a significant year-on-year increase of 233% [6] - The company's monthly active users (MAU) grew by 8% year-on-year to 376 million, while daily active users (DAU) increased by 9% to 117 million, indicating strong user engagement [6] Financial Performance - In Q3 2025, the company achieved total revenue of 76.9 billion yuan, marking a 5% increase both year-on-year and quarter-on-quarter [6] - The gross profit margin improved to 36.7%, up 1.7 percentage points year-on-year [6] - The company reported a net profit of 4.69 billion yuan, a turnaround from a loss of 0.88 billion yuan in the same period last year [6] Business Segments - Mobile gaming revenue in Q3 2025 was 15.11 billion yuan, down 17% year-on-year, primarily due to a high base from the previous year [7] - The advertising segment's revenue growth was driven by strong performance in sectors such as gaming, e-commerce, and automotive, with AI-related advertising revenue increasing by nearly 90% [8] - Live streaming and value-added services generated 30.23 billion yuan in revenue, a 7% year-on-year increase, with paid user numbers reaching 35 million [9] Future Projections - The company is projected to achieve revenues of 30.16 billion yuan in 2025, with a corresponding adjusted net profit of 2.5 billion yuan [11] - The target market capitalization for 2026 is estimated at 109.1 billion yuan, with a target price of 259 yuan per share [11]

Core Insights - Bilibili reported a total revenue of 7.69 billion RMB for Q3 2025, marking a 5% year-on-year increase, with adjusted net profit soaring by 233% to 790 million RMB [2] - The revenue structure has diversified, with contributions from value-added services, advertising, gaming, and IP derivatives at 39%, 33%, 20%, and 8% respectively [2] - The advertising revenue reached 2.57 billion RMB, growing 23% year-on-year, with significant contributions from luxury goods, beauty, and automotive sectors [2] Revenue Breakdown - Value-added services revenue was 3.02 billion RMB, up 7% year-on-year, with a total of 25.4 million annual members, 80% of whom are annual or auto-renewal subscribers [4] - Gaming revenue for Q3 was 1.51 billion RMB, supported by long-term operational strategies for popular titles [2][4] - AI-related advertising revenue surged nearly 90% year-on-year, reflecting the growing interest in AI content on the platform [2] User Engagement - Daily active users reached 117 million, with monthly active users at 376 million, and average daily usage time increased to 112 minutes, all historical highs [4] - The platform's gaming content viewing time grew by 22% year-on-year, indicating strong user engagement in gaming [4][5] - AI content viewing time increased by nearly 50%, attracting professional developers and industry experts to the community [5] Future Outlook - Bilibili's self-developed game "Escape from Duckkov" sold over 3 million copies globally within three weeks, generating over 200 million RMB in revenue, positively impacting Q4 earnings [3] - The company plans to continue its long-term operational strategy and focus on youth-oriented content to enhance user experience [3][5] - Bilibili aims to strengthen the synergy between community engagement and commercialization to foster a vibrant ecosystem [5]

Core Insights - Bilibili (NASDAQ: BILI, HKEX: 9626) reported a total revenue of 7.69 billion RMB for Q3 2025, marking a 5% year-over-year increase [1] - The platform experienced significant growth in user engagement, with daily active users reaching 117 million, an increase of 9% year-over-year [1][3] - The company achieved a substantial increase in adjusted net profit, which rose by 233% year-over-year to 790 million RMB [1][4] User Engagement - Daily active users reached 117 million, while monthly active users hit 376 million, both representing historical highs [3][11] - Average daily usage time increased to 112 minutes, up by 6 minutes year-over-year [1][11] - The number of monthly paying users exceeded 35 million, reflecting a 17% year-over-year growth [1][11] Community Ecosystem - The community ecosystem showed accelerated growth, with a 10% year-over-year increase in the number of official members, totaling 278 million [3] - The retention rate for users over 12 months remained stable at 80% [3][17] - Content engagement surged, particularly in AI-related content, which saw a nearly 50% increase in playback time [3][13] Revenue Breakdown - Total revenue for Q3 2025 was 7.69 billion RMB, with contributions from various segments: value-added services (39%), advertising (33%), gaming (20%), and IP derivatives and other businesses (8%) [4][8] - Advertising revenue reached 2.57 billion RMB, growing 23% year-over-year, driven by increased brand engagement across luxury, beauty, and automotive sectors [4][8] - Gaming revenue amounted to 1.51 billion RMB, supported by long-term operational strategies for popular titles [4][20] Profitability - Adjusted net profit for the quarter was 790 million RMB, a significant increase of 233% year-over-year [1][4] - Gross margin improved for the thirteenth consecutive quarter, reaching 36.7% [9] Creator Economy - The number of creators with over 10,000 followers increased by over 20% year-over-year, indicating a thriving creator community [3][14] - Nearly 2.5 million creators earned income through various channels on the platform, with average income per creator rising by 22% year-over-year [3][15] Cash Position - As of September 30, 2025, the company held cash and cash equivalents, term deposits, and short-term investments totaling 23.49 billion RMB [5]

Core Insights - Bilibili (referred to as "B站") reported a total revenue of 7.69 billion yuan for Q3 2025, representing a year-on-year growth of 5% [1] - The platform's daily active users reached 117 million, up 9% year-on-year, while monthly active users increased to 376 million, a growth of 8% [1] - The average daily usage time per user rose to 112 minutes, an increase of 6 minutes compared to the previous year [1] User Engagement - Content consumption in gaming, AI, and knowledge areas continued to grow, with gaming content viewing time increasing by 22% year-on-year and AI content viewing time nearly doubling with a growth of 50% [1] - The viewing time for automotive content grew by 20%, and travel content saw an 18% increase [1] - Domestic original content viewing time surged by 104%, with the series "凡人修仙传" achieving over 180 million views per episode, setting a historical record [1] - The number of "UP主" (content creators) with over 10,000 followers increased by over 20% year-on-year, and nearly 2.5 million "UP主" earned income through various channels, with average income per creator rising by 22% [1] Financial Performance - Bilibili's revenue from value-added services, advertising, gaming, and IP derivatives contributed 39%, 33%, 20%, and 8% respectively to total revenue [2] - Adjusted net profit for Q3 increased by 233% year-on-year, reaching 790 million yuan [2] - Advertising revenue accelerated to 2.57 billion yuan, a year-on-year growth of 23%, while gaming revenue stood at 1.51 billion yuan, supported by long-term operations of games like "Fate/Grand Order" and "Azur Lane" [2] - Revenue from value-added services reached 3.02 billion yuan, reflecting a 7% year-on-year increase [2]

Core Insights - Bilibili's game "Escape from Duckkov" has achieved significant success, selling over 2 million copies within two weeks of its release and receiving a 96% positive rating from Steam players, indicating a strong market reception [1][2][6] - The game aligns well with Bilibili's user base, which is predominantly young and creative, suggesting a potential for community-driven content to enhance game popularity [7][10] - Despite the success of "Escape from Duckkov," Bilibili faces challenges in diversifying its game offerings and developing self-published IPs to ensure sustainable growth in the gaming sector [8][9] Sales Performance - "Escape from Duckkov" reached over 2 million sales by November 2, ranking fifth on Steam's most-played games list, with a peak concurrent player count of 245,000 [1] - The game has received a 96% positive rating from players on Steam, reflecting its popularity and favorable reception [2] Player Feedback - Players have praised the game for its high completion level and rich content, with many finding it easy to pick up and play [5] - The development team incorporated player feedback into the game design, with 50% of the game's design influenced by player suggestions [5] Community Engagement - Bilibili's ecosystem allows for a "community-content-game" loop, where players engage with content creators, discuss strategies, and create derivative content, which drives game sales [6] - The game's design encourages community interaction, aligning with Bilibili's user preferences for creative and social gaming experiences [7] Market Position and Challenges - Bilibili's gaming revenue has fluctuated, with a decline in 2022 and a recovery in 2023, driven by the success of "Escape from Duckkov" and other established titles [8][9] - The company has recognized the importance of self-developed games for long-term sustainability, but has faced challenges in delivering consistent, scalable products [9][10] Future Outlook - Bilibili's strategy has shifted towards a more selective approach to self-developed games, focusing on quality over quantity [10] - The success of "Escape from Duckkov" may pave the way for more independent and expressive games that resonate with Bilibili's user base [10]

Summary of Bilibili's Conference Call Company Overview - The conference call focuses on Bilibili's gaming business, which has evolved through four distinct phases from reliance on agency games to self-developed titles and optimization strategies, culminating in record revenue from "Three Kingdoms: Strategy" [2][3]. Key Points and Arguments Gaming Business Evolution - Bilibili's gaming business has transitioned through four phases: 1. **2016-2019**: Rapid revenue growth through agency games like "FGO" and "Azur Lane," with revenue increasing from less than 500 million to 3.5 billion, accounting for over 80% of total revenue by 2019 [3]. 2. **2019-2021**: Shift towards self-development, investing in nearly 20 game companies, but faced challenges with unsuccessful projects [3]. 3. **2022-2023**: Major optimization phase, including leadership changes and strategic adjustments [3]. 4. **2024-Present**: Achieved record revenue of 5.6 billion from "Three Kingdoms: Strategy," a 40% year-on-year increase [2][3]. Future Product Expectations - Upcoming key products include "Three Kingdoms: Card" (testing on October 30) and the successful single-player game "Escape from Yakov," which sold 500,000 copies in four days, with potential sales reaching 1-2 million [2][6][8]. Revenue Projections - "Three Kingdoms: Card" is expected to generate annual revenue between 1-3 billion, with a central estimate of around 2 billion. If successful, Bilibili's gaming revenue could reach 7.3 billion in 2026, a 14% increase year-on-year [4][13]. Strategic Changes - Key strategic changes include: 1. Focusing on creative leadership and exclusive agency rather than deep self-development [5]. 2. Expanding game categories to include SLG, card games, and independent titles [5]. 3. Emphasizing small team productions for efficiency [5]. 4. Utilizing platform value for effective marketing through community engagement [5]. Market Positioning - Bilibili aims to differentiate "Three Kingdoms: Card" from competitors like Giant Network by targeting a broader user base with lower user acquisition costs and a focus on younger audiences [12][13]. Financial Outlook - The financial outlook suggests that if "Three Kingdoms: Card" performs well, Bilibili's gaming revenue could significantly boost overall company performance, with potential net profits reaching 3.5 billion to 3.8 billion by 2026 [4][14]. Investment Potential - Based on projections, Bilibili's target market value could reach 123.6 billion to 150 billion RMB, indicating a potential stock price increase of 40% to 78% from current levels [14]. Additional Important Insights - "Escape from Yakov" is designed as a single-player PVE game with a unique top-down perspective, making it more accessible to players who may struggle with traditional first-person gameplay [8][9]. - The game has significant growth potential if it can expand into online and mobile formats, which would require additional resources and support from Bilibili [9]. - The competitive landscape for "Three Kingdoms: Card" is shaped by the existing popularity of "Three Kingdoms Kill," which has a substantial market presence [11][12]. This comprehensive analysis highlights Bilibili's strategic shifts, product expectations, and financial projections, indicating a positive outlook for the company's gaming business and overall market position.

Core Viewpoint - Bilibili-W is expected to report Q3 2025 revenue between 76.00 and 77.78 billion yuan, representing a year-on-year growth of 4.0% to 6.5%, with net profit projected between 2.36 and 3.61 billion yuan, showing a significant increase of 396.8% to 554.0% [1][3] Revenue and Profit Forecast - Q3 revenue forecast: 76.00 to 77.78 billion yuan, with a year-on-year growth of 4.0% to 6.5% [1][3] - Q3 net profit forecast: 2.36 to 3.61 billion yuan, with a year-on-year growth of 396.8% to 554.0% [1][3] - Adjusted net profit forecast: 5.91 to 6.93 billion yuan, with a year-on-year growth of 150.2% to 193.4% [1][3] Recent Performance Insights - In Q2 2025, Bilibili-W reported revenue of 73 billion yuan, a year-on-year increase of 19.8%, with a gross profit margin of 36.5% [4] - Non-GAAP net profit for Q2 2025 was approximately 5.6 billion yuan, with a net profit margin of about 7.7% [4] - Daily active users reached 109 million, and monthly active users reached 363 million, with over 31 million monthly paying users, a 9% year-on-year increase [4] Business Segment Performance - Advertising revenue grew by 30% year-on-year, with the number of advertisers increasing by over 20% [4] - Mobile gaming revenue increased by 60% year-on-year, with several games leading sales charts [5] - Live streaming and value-added services revenue grew by 11% year-on-year, with monthly paying users exceeding 31 million [5]

Core Viewpoint - Huatai Securities initiates coverage on Bilibili's Hong Kong stock with a "Buy" rating and a target price of HKD 316.5, corresponding to a 25E PS of 4.1x, highlighting the company's unique position as a mid-video community platform with a solid ecosystem and robust user retention [1][2]. Group 1: Community and User Engagement - Bilibili has evolved from a niche ACG community to a comprehensive video ecosystem over 15 years, establishing a competitive moat through its unique community atmosphere and closed-loop ecosystem [1]. - The platform primarily attracts a young demographic, with over 80% of users under 35 years old, showcasing high user retention rates, including over 80% for formal members and more than 84% for users with over ten years on the platform [1]. Group 2: Advertising Business - The advertising segment has transitioned from an exploratory phase to systematic and scalable growth, with an expected overall revenue growth of 27.7% in 2024, driven by a 40% increase in performance advertising [1]. - The completion of the advertising infrastructure and the integration of AI technology have significantly enhanced advertising efficiency, with a projected 10% year-on-year increase in eCPM for the first half of 2025 [1]. Group 3: Gaming Business - The gaming segment has shown a strong recovery, with revenues reaching CNY 5.6 billion in 2024, a 40% year-on-year increase, largely due to the successful launch of the new game "Three Kingdoms: Strategy Determination" [2]. - The strategy focuses on long-term operation and youth-oriented game categories, with both self-developed and exclusive agency games contributing to revenue growth [2]. Group 4: Market Perspective and Valuation - The market tends to focus on valuation and growth certainty, but the company’s community advantages and high active user growth remain underappreciated [2]. - Revenue projections for 2025-2027 are CNY 30.03 billion, CNY 32.72 billion, and CNY 35.09 billion, with adjusted net profits expected to be CNY 2.31 billion, CNY 3.18 billion, and CNY 3.99 billion respectively [2].

Investment Rating - The report initiates coverage on Bilibili (9626 HK) with a "Buy" rating and a target price of HKD 316.5, corresponding to a 2025E PS of 4.1x [1][7]. Core Insights - Bilibili has evolved from a niche community to a comprehensive video ecosystem, establishing a strong competitive moat through its unique community atmosphere and high user retention [2][18]. - The advertising business has transitioned into a systematic growth phase, with a projected revenue increase of 27.7% year-on-year in 2024, driven by a 40% growth in performance advertising [3][19]. - The gaming segment has shown robust recovery, with revenues reaching RMB 5.6 billion in 2024, a 40% year-on-year increase, supported by the successful launch of new games [4][22]. - The company is expected to achieve significant profit growth, with adjusted net profits projected at RMB 2.31 billion, RMB 3.18 billion, and RMB 3.99 billion for 2025-2027 [6][20]. Summary by Sections Community Ecosystem - Bilibili's community has a high retention rate, with over 80% for formal members and 84% for users registered for over ten years, indicating a deep user-platform bond [2][21]. - The platform's user base is predominantly young, with over 80% of users under 35 years old, showcasing a strong generational engagement [2][21]. Advertising Business - The advertising infrastructure has been fully established, enabling comprehensive coverage across various platforms, including long and short videos, PC, and search [3][19]. - AI technology integration is enhancing advertising efficiency, with a 10% year-on-year increase in eCPM in the first half of 2025 [3][19]. Gaming Business - The gaming revenue for 2024 is expected to reach RMB 5.6 billion, with a 40% year-on-year growth, driven by the successful launch of new titles [4][22]. - The strategy focuses on long-term operations and the introduction of younger game genres, with the upcoming release of "Three Kingdoms: Hundred Generals Card" expected to continue this trend [4][22]. Financial Performance - Revenue projections for 2025-2027 are RMB 30.03 billion, RMB 32.72 billion, and RMB 35.09 billion, respectively, with adjusted net profits expected to rise significantly [6][20]. - The overall gross margin is anticipated to improve from 17.6% in 2019 to 32.7% in 2024, driven by a higher proportion of high-margin advertising and gaming revenues [20].