Jinwu Financial News | According to BOC International Development Research Report, Bilibili (09626)'s losses narrowed better than expected in the first quarter. Bilibili's revenue for the first quarter of 2024 was 5.7 billion yuan (same below), up 12% year on year, in line with expectations. The adjusted net loss to mother was $440 million, a decrease of 57% over the previous year. Ad revenue exceeded this forecast by 5%, up 31% year on year. Among them, performance advertising increased 50% + year over year. Benefiting from increased traffic, ad inventory release, and product optimization, game/digital appliances/platform e-commerce maintained high double-digit growth. Live streaming and charging fees led to a 17% increase in value-added service (VAS) revenue in the first quarter.
According to the bank, management maintained the guidelines for turning losses into profits at the adjusted operating profit level for the 3rd quarter of 2024. The bank expects advertising revenue to continue to grow rapidly in the 2nd quarter (+26%), with game revenue -6% month-on-month, but visibility increased in the second half of the year with the launch of new games.
Considering that advertising revenue growth exceeded expectations, the bank slightly raised its 2024/2025 revenue forecast and adjusted the valuation to 2025. Based on a revenue forecast of 28 billion yuan, the average market sales rate of comparable entertainment companies was 1.8 times the 2025 market sales rate. The target price was raised from $13/HK$101 to HK$17/HK$132. The company maintains a differentiated content community positioning, and product optimization and AI empowerment effects are gradually showing. It is expected to further enhance commercial monetization potential, be optimistic about the steady growth trend of advertising, live streaming and charging payments, and maintain purchases.