20230818-招银国际-Monetization_improvement_while_driving_for_ecosystem_growth_7页_1mb

Bilibili (BILI US) Company Update Summary

Key Financial Highlights

• Q2 2023 revenue: RMB5.3 billion, up 8% YoY, in line with estimates.
• Adjusted net loss: RMB964 million, narrowed 51% YoY.
• Full-year revenue guidance revised down to RMB22.5-23.5 billion (3-7% YoY growth), primarily due to delays in game launches and softer IP derivatives performance.

Business Updates

• Ad business strong: Revenue rose 36% YoY to RMB1.6 billion, driven by performance-based ads (+60% YoY) and e-commerce sector growth.
• VAS revenue increased 9% YoY to RMB2.3 billion, led by live streaming.
• Mobile games revenue fell 15% YoY to RMB891 million, attributed to lack of new titles.

User and Community Development

• Average daily active users (DAUs) grew 15% YoY to 96.5 million, with DAU/MAU ratio improving.
• Management expects DAUs to exceed 100 million in 3Q23 and higher daily time spend record.

Profitability Improvement

• Gross margin rose to 23.1%, supported by cost control; expected to expand sequentially.
• Adjusted net loss margin narrowed from -40.0% to -18.1%, on track for breakeven by FY24-end.

Valuation and Rating

• Target price lowered to US$25.5 per ADS from US$27.20.
• Maintain BUY rating, citing strong ad monetization and ecosystem growth potential.