Bilibili Inc (BILI US)_Hold_ Operating leverage can go on to support earnings

Summary of Bilibili Inc (BILI US) Conference Call Company Overview - Company: Bilibili Inc (BILI US) - Industry: Internet Software & Services - Market Cap: USD 9.246 billion - Current Share Price: USD 22.11 - Target Price: USD 21.50 - Rating: Maintain Hold Key Financial Highlights - 4Q24 Performance: Revenue grew 22% year-over-year to RMB 7.734 billion, beating consensus estimates by 1% [34] - Mobile Game Revenue: Increased by 79% year-over-year to RMB 1.798 billion, slightly missing estimates [35] - Non-Game Revenue: Grew 11% year-over-year to RMB 5.937 billion, in line with expectations [35] - Advertising Revenue: Increased by 24% year-over-year, matching estimates [35] - Value-Added Services (VAS): Rose 8% year-over-year, exceeding estimates [35] - Operating Profit: Non-GAAP operating profit reached RMB 463 million, beating estimates by 12% [36] - Net Profit: Non-GAAP net profit was RMB 453 million, slightly missing estimates [36] - Operating Cash Flow: Positive at RMB 1.4 billion, up 119% year-over-year [35] Revenue Estimates and Growth Projections - 2025 Revenue Estimate: RMB 29.663 billion, representing an 11% year-over-year growth [38] - 2026 Revenue Estimate: RMB 31.496 billion, with a 6% growth projection [38] - 2027 Revenue Estimate: RMB 33.255 billion, maintaining a 6% growth rate [38] - Game Revenue: Expected to contribute significantly, with mobile games projected at RMB 6.227 billion in 2025 [17] - Ad Revenue: Anticipated to grow 18% year-over-year in 2025 [17] User Engagement and Growth Strategy - Daily Active Users (DAU): Increased by 3% year-over-year to 103 million [36] - Monthly Active Users (MAU): Rose 1% year-over-year to 340 million [36] - User Engagement: Daily time spent per user increased by 4% year-over-year to 99 minutes [36] - Growth Strategy: Plans to expand user base through campaigns targeting various age groups, including a partnership with CCTV for the CNY Gala [2] Emerging Verticals and Initiatives - Fan Charging Business: Reported strong growth momentum of 400% year-over-year in 2024 [2] - New Categories: Focus on education, travel, and e-commerce through initiatives like Bili Mall [2] - Mini Programs: Launching to generate incremental ad revenue from games and short dramas [2] Risks and Challenges - Ad Revenue Growth: Expected to slow down despite new initiatives [9] - Market Competition: Potential risks from rising competition and regulatory tightening [39] - Game Revenue Decay: Concerns over potential faster decay in gross billing for key games like Sanmou [39] Valuation Metrics - PE Ratios: Projected at 31.2x for 2025 and 19.5x for 2026 [5] - EV/EBITDA: Expected to decrease from 38.0x in 2024 to 15.1x in 2025 [12] - Free Cash Flow Yield: Estimated at 5.7% for 2024 [12] Conclusion - Bilibili Inc shows promising growth in revenue and user engagement, but faces challenges in ad revenue growth and market competition. The company maintains a hold rating with a target price reflecting a slight downside from the current share price.