Investment Rating - The report indicates a strong market vitality in the mini-game sector, with a projected market size of approximately 610 billion yuan in 2025, reflecting a year-on-year growth of 22% [7][6]. Core Insights - The mini-game industry is transitioning from a phase of rapid growth driven by traffic bonuses to a more refined operational phase focused on existing user engagement and content creation [7]. - The competition in the domestic mini-game market will increasingly center on operational capabilities, content creation value, and platform adaptability, with live streaming, content, social interaction, and multi-platform operations identified as four core strategies for industry breakthroughs [7]. - The number of active users on major platforms continues to rise, with the leading social software platform reaching 571 million monthly active users, and the leading short video platform seeing a 44% increase in active users [11][10]. Summary by Sections 1. Mini-Game Market Overview - The mini-game market is expected to exceed 700 billion yuan by 2026, with a significant growth rate of 22% in 2025 [7][6]. - The average daily usage frequency per user is approximately 5.1 times, with a 4.5% year-on-year increase, while the average daily usage duration has risen to 24.6 minutes, marking a 27.2% increase [15][14]. 2. Mini-Game Market Buy Volume Trends - The daily expenditure on mini-game user acquisition is approximately 144 million yuan, reflecting a 15.6% increase from Q1 [25]. - The number of games in the mini-game sector has grown by over 54% year-on-year, reaching approximately 51,000 games in 2025, while mobile app games have only seen a 5.2% increase [30]. - The number of games launched on Douyin mini-games has surged by nearly 70%, while WeChat mini-games have also shown a recovery in growth [35]. 3. Key Categories & Case Analysis - Modern themes in mini-games have seen a significant increase, with over 15,000 products launched, reflecting a 52.23% year-on-year growth [76]. - The top three gameplay types (MMORPG, idle, and card games) account for over 70.6% of the top 500 products, indicating a high market concentration [86]. - The strategy SLG segment has shown a continuous increase in the number of products, with a year-on-year growth of 38.8%, driven by user preference for lightweight operations combined with heavy strategy [89].

Investment Rating - The report maintains a "Buy" rating for Bilibili (BILI.O) [4][6] Core Insights - The company is expected to achieve revenue of 7.33 billion RMB in Q2 2025, representing a year-over-year growth of 19.7%. The revenue breakdown by business segment includes gaming at 1.61 billion RMB (yoy +60%), VAS at 2.82 billion RMB (yoy +10%), advertising at 2.42 billion RMB (yoy +19%), and e-commerce at 480 million RMB (yoy -8%) [1] - The report highlights the strengthening of advertising infrastructure through AI, including the reconstruction of recommendation algorithms and creative generation, which is expected to enhance efficiency and effectiveness in advertising [3] - The gaming segment is anticipated to see significant growth with the launch of new games and updates, which are expected to drive user engagement and monetization [2] Summary by Sections Revenue and Profit Forecast - The projected revenue for Bilibili is expected to grow from 22.53 billion RMB in 2023 to 30.24 billion RMB in 2025, with a growth rate of 12.7% in 2025 [5][10] - Adjusted net profit is forecasted to improve from a loss of 3.41 billion RMB in 2023 to a profit of 2.15 billion RMB in 2025 [5][10] Business Segment Performance - The gaming business is expected to contribute significantly to revenue, with notable titles like "FGO" and "碧蓝航线" driving user growth and revenue [2] - Advertising revenue is projected to grow due to enhanced AI capabilities, with an expected ROI achievement rate exceeding 75% in 2024 [3] Financial Metrics - The report provides a detailed financial outlook, including expected EPS growth from -11.46 RMB in 2023 to 1.91 RMB in 2025 [5][10] - The P/S ratio is projected to decrease from 3.3 in 2023 to 2.5 in 2025, indicating a potential increase in valuation attractiveness [5][10]

Core Viewpoint - Bilibili (B站) reported a strong Q1 2025 performance with a net revenue of RMB 7 billion (USD 965.1 million), reflecting a 24% year-on-year growth, driven by increased user engagement and advertising revenue [1][8] Revenue and User Engagement - The company's Q1 user daily active usage (DAU) reached 108 minutes, a historical high, indicating users are willing to spend time and money on quality content [1][2] - Paid users reached 32 million in Q1 2025, with charging revenue increasing by 200% year-on-year, highlighting a new trend in the video sector where users pay for preferred content [1][2] Advertising Revenue - Bilibili's advertising revenue grew by 20% in Q1, outpacing the industry, primarily due to a strong increase in performance-based ads, which saw growth exceeding 30% [1][8] - The growth in ads is attributed to Bilibili's core competitive advantages, including high-quality content and user value, with a focus on 26-year-old users whose disposable income is rising [1][8] Gross Margin and Profitability - The gross margin for Q1 was 36.3%, driven by stable costs associated with gaming and advertising, which accounted for over 50% of total revenue [1][10] - The company is confident in maintaining and improving gross and net profit margins in the future, with a medium to long-term target of 40-45% gross margin [10][11] Content Strategy and AI Integration - Bilibili emphasizes the importance of high-quality content, which is seen as a long-term competitive advantage, and plans to enhance its content strategy further [2][3] - The integration of AI is expected to enhance content quality and user engagement, with Bilibili being positioned as a significant player in the AI era due to its extensive data resources [4][5] Gaming Sector - The gaming segment is focused on long-term operations, with plans for new content and user retention strategies, including the introduction of new seasons and features [6][7] - Bilibili aims to expand its gaming offerings and enhance user engagement through innovative content and community interactions [6][7]