Before the opening on May 13, US Eastern time, bilibili (BILI.US/9626.HK(hereinafter referred to as "bilibili") released its first financial report this year, which is also its first report card after its secondary listing in Hong Kong.

On the whole, bilibili's performance this quarter is still strong on the basis of the high performance growth catalyzed by the epidemic in the first quarter of last year.

I. the performance exceeded expectations and the adjusted loss was basically flat compared with the previous month.

According to the data, bilibili's revenue for the quarter was about 3.9 billion yuan (RMB, the same below), an increase of 68.5% over the same period last year, and an adjusted net loss of about 660 million yuan, which was larger than the same period last year, but both exceeded the consensus expectations of Bloomberg analysts (about 3.78 billion yuan, an adjusted net loss of about 800 million yuan).

Among them, the loss is larger than the same period last year.Mainly because bilibili's strategy focuses on user growth at this stage, the continuous investment in brand promotion and high-quality content leads to higher costs and expenses.. On a quarterly basis, gross profit margin and adjusted net loss for the quarter were basically flat compared with the previous quarter.

(source: company quarterly report, Gelon exchange table)

(source: company quarterly report, Gelon exchange table)

Second, the diversification of revenue has been deepened, and the realization of advertising and e-commerce has been accelerated.

1) the growth of value-added business is still significant, and the game business remains stable.

(source: company quarterly report, Gelon exchange table)

Behind bilibili's higher-than-expected revenue this quarter, value-added services (mainly live broadcast + big members) can be said to have contributed. According to the financial report, the division contributed income of about 1.5 billion yuan during the period, an increase of 89% over the same period last year.To surpass the game business for two consecutive quarters。

Among them, the big member business mainly relies on OGV content expansion to promote the improvement of users' payment conversion rate.. Data show that at the end of the first quarter, the number of bilibili's large members increased by nearly 50% to 16.1 million compared with the same period last year.

In recent years, bilibili has made great efforts to expand OGV content, from documentaries to variety self-control, and then to the online drama network last year, and has made continuous breakthroughs. Bilibili still performs well in superior animation, documentaries and other categories this season.

In terms of animation, what about the new drama "transformed into spiders" this season! There are more than 100 million broadcasts in the "Guogong Village" station, and at the end of January this year, Guochuang's "Xuanwu country of Wu Liuqi" has more than 700 million broadcasts on the whole network. At the same time, Tianguan Blessing, which was released at the end of October last year, continues to be very popular in the first quarter of this year. It now has 370 million views on the site and has logged on to overseas platforms, including Netflix and Funimation. In addition, the final chapter of "Linglong" and "time Agent" will also be launched one after another in the second quarter; in terms of variety shows and documentaries, "how about going to your Home for dinner", "Strange Food", "Little Youth" and other works will be launched in the first quarter, achieving a bumper harvest of both flow and word-of-mouth.

Live broadcast businessGames are already the first vertical category, and the overlap rate between LVB VJ and video UP master is more than 40%, which ensures the continuous output of bilibili's game LVB content to a large extent. Bilibili now holds the trump card game e-sports IP resources. at present, in addition to the exclusive broadcasting rights of League of Legends S-game in Chinese mainland District for three years (2020-2022), he also gets the live broadcasting rights of the game's annual regular season, which will contribute to the continuous growth of its subsequent traffic.

And in terms of game business,Due to the lack of a large number of new games online in the first quarter, it maintained steady growth by virtue of stock games. However, bilibili has obtained version numbers for more than a dozen single-generation games, and a number of new games will be launched gradually in the second quarter, including "Kangong riding Crown Sword", "Mobile War Ji Fusion", "Sword realm: black Swordsman ace" and so on. Among them, "Kan Gong riding Crown Sword" was launched on April 27, and the players responded enthusiastically after the game was launched. According to gamma data, "Kangong Riding Crown Sword" ranks Top 2 in the new game in April and is expected to exceed 200 million yuan in the first month.

CICC believes that due to the impact of the launch time of new games, the growth rate of game revenue for the whole year is expected to be low in front and high after. Xinyou's revenue contribution in the second half of the year will be very significant, and it is expected that game revenue for the whole year will grow by 25% to 6 billion yuan compared with the same period last year

In addition, although TapTap and other game communities, such as free channel fees, are becoming a new choice for many game manufacturers, manufacturers such as Miha you are also promoting their own game communities, which may weaken bilibili's channel advantage to some extent. However, with the diversification of bilibili's business, its dependence on games is also gradually weakening. At the same time, bilibili is also actively laying out the whole game industry chain. in the first quarter of this year, he has successively invested in a number of game research and development and distribution manufacturers, such as Heart Company, medium-hand Tour, celadon Digital, and so on, in order to further consolidate its position as the game industry chain and feed its game content ecology.

2) accelerated realization of advertising and e-commerce business, with revenue more than tripling compared with the same period last year

Data show that advertising revenue of about 715 million yuan, e-commerce and other revenue of about 519 million yuan, year-on-year growth rate of more than twice. Among themThe advertising business has accelerated growth for eight consecutive quarters compared with the same period last year.。

For now,Bilibili still has the potential for continuous commercialization in advertising and e-commerce business.

On the one hand, with the high-quality growth of user value and the rapid development of China's emerging consumer brands, leading companies such as Meituan, Tencent, CITIC Bank and China Unicom have been stationed in bilibili since the first quarter of this year. In addition, high-end luxury brands such as LVMH and Gucci also set up an enterprise account or launched a brand in bilibili. According to this trend, bilibili advertising business will probably continue to maintain high growth. According to the company's earnings call, the company has not increased the advertising loading rate in 2021 and will keep it at a low level of about 5%, in order to promote the healthy development of advertising commercialization business.

On the other hand, in the advantageous field of ACG derivatives, bilibili adopts a proprietary model, which is expected to promote the growth of GMV and related revenue with the increase of SKU in the future.

Third, from the "Z generation" to the "Z + generation": continue to break the circle, and the user stickiness remains high.

Bilibili in accelerating the promotion of commercialization at the same time, its basic users continue to grow across the board, a number of core indicators hit new highs.

(source: company quarterly report, Gelon exchange table)

Data show that bilibili's average MAU this quarter is about 223 million, of which the mobile MAU has exceeded 200 million, a year-on-year growth rate of more than 30% and a month-on-month growth rate of more than 10%. In addition, DAU exceeded 60 million, an increase of 18% over the same period last year, and the proportion of DAU/MAU was about 27%, which was basically stable compared with the previous month, and the number of users continued to increase steadily.

While MAU and DAU continue to rise, the number of paying users has also maintained a steady upward trend. According to the data, the paid MAU in this quarter reached 20.5 million, an increase of 53% over the same period last year, a net increase of 2.6 million per quarter, and the overall payment penetration rate increased to 9.2% from 8.9% in the fourth quarter of last year. At the same time, the single user ARPPU reached 73 yuan during the period, an increase of 23.3% over the same period last year.

(source: company quarterly report, Gelon exchange table)

In the user base continues to expand at the same time, bilibili still maintains a high user stickiness. According to the data, by the end of this quarter, the number of full members of bilibili reached 112 million, an increase of 36.6% over the same period last year, and the user retention rate in the 12th month remained at about 80%. During the period, the average daily use time was about 82 minutes, an increase of 7 minutes from the previous month, and the average number of daily content views increased by 47% compared with the same period last year. The average number of monthly user interactions increased by 35% year-on-year.

Summary

With the acceleration of commercialization, bilibili still got off to a good start and set the tone of high growth throughout the year.. However, due to the repeated global epidemic situation, US debt yields, rising inflation fears and other factors, capital markets at home and abroad were in a relatively volatile period in the first half of this year, while technology stocks that enjoyed higher valuations in the previous period suffered a sharp pullback one after another. Bilibili is no exception.

However, the short-term rise and fall mainly depends on the mood, while the long-term trend depends on the ability to create value.Bilibili is currently recognized as a scarce core asset of the Internet, with excellent track position, sustained and healthy development of content ecology and community atmosphere, steady upward user base and strong user stickiness. With the continuous expansion of user ecology in the future, the potential for sustainable commercialization is still sufficient.。

And BG increased its holdings of bilibili in (Baillie Gifford) in the first quarter, which is undoubtedly a strong confirmation of its long-term value. It is understood that BG, known as the technology stock "Buffett", is famous for its ultra-long-term style of holding high-quality growth companies, with a very low turnover rate. According to 13F documents, bilibili bought about 5.96 million shares by BG in the first quarter, making it one of the top five stocks with the largest increase in holdings this quarter (including MRNA, CPNG, BNTX, TTD, BILI).

At present, bilibili is still in the stage of "attacking the city and winning territory", and the profit model has not yet been finalized, which can be seen from the company's current strategic focus on the number of users, in fact, it also shows that there is still a lot of room for growth. Bilibili currently has a cash asset balance of 27 billion yuan (including cash and cash equivalents, term deposits and short-term investments), which provides sufficient financial guarantee for it to continue to expand its content ecology and enhance its brand effect.

It is observed that bilibili's short-term trend will show certain characteristics, often there will be a wave of rise before the disclosure of the quarterly report, and there will be a pullback after the end of the quarterly report, coupled with market worries about inflation, it may cast a shadow over bilibili's short-term trend. Investors who are more concerned about the growth of their long-term value should still hold on to their chips, because any position may be low compared to the future.