2025-08-26 01:19Summary of Bilibili Inc. (BILI) Conference Call Company Overview - Company: Bilibili Inc. (BILI) - Market Cap: $10.0 billion - Enterprise Value: $7.3 billion - Industry: Games, Entertainment & Healthcare Tech Key Points Advertising Outlook - Bilibili's advertising growth is expected to be robust, with a projected 20% year-over-year growth for 2H25, driven by: - Increased ad inventory and higher ad load due to growing user traffic [2][25] - An upward trajectory in effective cost per mille (eCPM) supported by improved algorithms and a broader client base [2][25] - The company is refining its ad infrastructure, indicating ample room for improvement in monetization [2] Game Pipeline and Approvals - The near-term game outlook is cautious, with guidance for 2H25 indicating a potential 15% to high-teens percent decline in game revenue year-over-year due to a tough comparison base from the previous year [3][22] - Bilibili received approvals for two games, Trickcal RE:VIVE and Escape from Duckov, which are expected to enhance visibility for its game pipeline [3][24] - The casual game Sanguo: Ncard is anticipated to launch by the end of 2025 or early 2026, contributing to future growth [3][27] Financial Estimates and Adjustments - Revenue estimates for 2025-2027 have been fine-tuned downwards by -2% to -1% due to a lighter game pipeline, although advertising performance is stronger than expected [4][18] - The revised revenue estimates are as follows: - 2025E: Rmb 29,959.9 million (down from Rmb 30,376.6 million) - 2026E: Rmb 32,992.4 million (down from Rmb 33,460.3 million) - 2027E: Rmb 35,790.2 million (down from Rmb 36,608.4 million) [5][19] Margins and Profitability - The company aims to achieve a 10% adjusted operating profit margin by the end of 2025, benefiting from operating leverage [26] - Gross profit margin is expected to improve sequentially, reaching approximately 37% in Q4 [26] User Engagement and Growth Metrics - Monthly Active Users (MAU) are projected to grow from 341 million in 2024 to 373 million by 2027, indicating a steady increase in user engagement [28] - Daily Active Users (DAU) are expected to rise from 104 million in 2024 to 120 million by 2027 [28] Competitive Landscape - Bilibili's advertising revenue is projected to grow significantly, with a focus on young users, which may help brands gain exposure beyond traditional circles [2] - The top verticals contributing to advertising growth include games, 3C digital products, e-commerce, internet services (including AI), and automotive sectors [27] Conclusion - Bilibili Inc. maintains a Buy rating with a 12-month price target of $26.30, reflecting a 9.7% upside from the current price of $23.98 [1] - The company is positioned to leverage its advertising growth while navigating challenges in the gaming segment, with a focus on improving margins and user engagement metrics [1][3][25]