Core Insights - The advertising revenue landscape is showing a clear divide, with nearly half of the companies reporting positive growth while the other half struggles, highlighting the shift from traffic-driven success to algorithm efficiency and precision targeting [1][2] - AI technology is becoming a critical factor in redefining the advertising industry, driving competition based on algorithm efficiency and innovation speed, with companies leveraging AI as a key asset for growth [1][2] Company Performance - Tencent's advertising revenue reached 35.8 billion, growing 19.73% year-over-year, marking its 11th consecutive quarter of double-digit growth, driven by AI improvements and a robust WeChat ecosystem [2] - Kuaishou reported advertising revenue of 19.765 billion, up 12.81% year-over-year, with significant contributions from short dramas and local life services, supported by AI technology [3][4] - Bilibili's advertising revenue reached 2.45 billion, growing 20% year-over-year, with strong performance in effect advertising and an increase in advertisers, aided by AI-driven enhancements [5][6] - Xiaomi's advertising revenue was 6.8 billion, up 13.33% year-over-year, benefiting from a growing user base and enhanced AI capabilities for targeted advertising [7][8] - BlueFocus achieved advertising revenue of 18.103 billion, with a year-over-year growth of 20.08%, driven by AI and global expansion strategies [9][10]

Investment Rating - The report maintains a "Buy" rating for Bilibili, with a target price adjusted to HKD 237 [6][13]. Core Insights - Bilibili is positioned as a leading online video and content community platform in China, focusing on enriching the daily lives of the younger generation. The company has shown significant user growth and accelerated commercialization, with a notable operating leverage [3][10]. Financial Summary - Total revenue is projected to grow from RMB 22,528 million in 2023 to RMB 36,484 million by 2027, reflecting a compound annual growth rate (CAGR) of approximately 9.2% [5]. - Adjusted net profit is expected to turn from a loss of RMB 3,425 million in 2023 to a profit of RMB 4,210 million by 2027, indicating a substantial recovery and growth trajectory [5]. - The adjusted net profit margin is anticipated to improve from -15.2% in 2023 to 11.5% in 2027 [5]. User Growth and Engagement - As of Q1 2025, Bilibili has 368 million monthly active users (MAU) and 107 million daily active users (DAU), with an average daily usage time of 108 minutes [10][17]. - The platform has a strong user base among the Z+ generation, with 70% of this demographic being Bilibili users [10][27]. Community and Content Ecosystem - Bilibili's user engagement is driven by a high level of interaction, with a monthly average of 16.7 billion interactions and a stable growth in paid memberships, reaching 26.4 million by Q1 2025 [40][41]. - The platform's content is primarily user-generated (PUGV), which constitutes 95% of the viewing volume, showcasing a vibrant creator ecosystem [30][38]. Commercialization and Revenue Streams - The report highlights the acceleration of Bilibili's commercialization efforts, with significant growth in gaming, value-added services, advertising, and IP derivatives [10][19]. - The advertising revenue has shown a 30% year-on-year increase, with over 35% more advertisers on the platform compared to the previous year [10][19]. Management and Corporate Structure - Bilibili's management team holds over 70% voting rights, ensuring strong control over corporate decisions. Key figures include Chairman and CEO Chen Rui, who has over 20 years of experience in the internet and technology sectors [22][24]. - The company has established strategic partnerships with major players like Tencent and Alibaba, enhancing its content and operational capabilities [22][24].