2025-03-03 10:45Summary of Bilibili Inc. (BILI) NDR Takeaways Company Overview - Company: Bilibili Inc. (BILI) - Date of Meeting: February 27, 2025 - Context: Discussion of 4Q24 results and 1Q25 outlook Key Highlights Advertising Performance - 4Q24 Advertising Growth: Achieved a solid +24% year-over-year (yoy) growth, driven by strong performance ads (+40% yoy) and healthy native and brand ads (both at double-digit% yoy) [1][3][5] - 1Q25 Advertising Outlook: Management anticipates advertising revenue to grow at +20% yoy, expressing optimism about ad momentum for FY25 [1][3][5] - Traffic Growth: Video Views (VV) increased by +14% yoy in 4Q24, expected to continue growing at double-digit% in 2025 [3][5] - Ad Load: Currently at 6%+, which is lower than peers' teens% level, indicating potential for increase [3][5] - eCPM: Positioned between Douyin and Kuaishou, with upside potential through ad algorithm enhancements [5] Gaming Segment - 4Q24 Gaming Growth: Surged +79% yoy, primarily due to the success of Sanguo NSLG [1][6] - 1Q25 Gaming Outlook: Management targets +70-75% yoy growth, with several upcoming titles awaiting Banhao approval for potential release in 2H25 [1][6] - Sanguo SLG Season 6: Designed for lighter monetization compared to Season 5, aiming for a balanced in-game ecosystem [7] Margin Expectations - 1Q25 Gross Margin: Expected to be around 36%, largely flat quarter-over-quarter (qoq) [1][6] - Long-term Margin Targets: Mid-to-long term gross profit margin (GPM) target of 40%+ and operating profit margin (OPM) of 15-20% through improved cost structure and favorable revenue mix [1][6] AI Integration - AI Utilization: Bilibili is adopting AI for content review and ad material generation, which is expected to enhance efficiency and reduce staffing needs [1][11] - Future AI Benefits: Management believes Bilibili will be a key beneficiary of generative AI advancements over the next 1-2 years [1][11] Capital Allocation - Share Buyback Program: Currently has a US$200 million share buyback program [1][11] - Investment Opportunities: Management sees multiple growth opportunities to sustain competitiveness [1][11] Additional Insights - Verticals in Advertising: Top verticals in 4Q24 included Games, Digital products, Home appliances, E-Commerce, Internet services, and Automobiles [5] - Improvement in Advertiser Sentiment: Noted moderate improvement for 1Q25 [5] - Revenue Sharing Costs: Accounted for 41% of total revenue in 4Q24, with fixed costs at 17% [7] Financial Projections - Revenue Growth: Expected revenue for 2025 is RMB 30.215 billion, with a projected growth rate of 19% [20][22] - Price Target: 12-month price target set at US$23.70, with an upside of 11.9% from the current price [22] Risks - Key Risks Identified: Potential slowdown in advertising, weaker-than-expected game grossing, and challenges in reducing content costs/revenue sharing as a percentage of revenue [20]