20220909-招银国际-Short-term_pressure_from_macro_uncertainty_4页_840kb

Bilibili (BILI US) Company Update Summary

Core Content Overview

This report provides an equity research update on Bilibili (BILI US), analyzing its financial performance, business segments, and future outlook in the context of macroeconomic uncertainty and internal challenges. It outlines key financial metrics, revenue forecasts, and strategic outlook for the company.

Key Financial Performance

• 2Q22 Results:

  • Revenue was in line with expectations, growing 9% YoY.
  • Revenue by segment:
    • Mobile games: -15% YoY
    • Advertising: +10% YoY
    • Live broadcasting & VAS: +29% YoY
    • Others: +4% YoY
  • Non-GAAP net loss reached RMB2.0bn, slightly exceeding the consensus of -RMB1.7bn.
  • GPM (Gross Margin) was 15%, and is expected to improve sequentially in 2H22E.

• 3Q22E Revenue Guidance:

  • Forecasted at RMB5.6-5.8bn, 4% below the consensus due to soft VAS and e-commerce performance.
  • Revenue growth is expected at +9% YoY, with:
    • Mobile games: +5% YoY
    • Advertising: +18% YoY
    • Live broadcasting & VAS: +11% YoY
    • Others: +5‰ YoY

• Margin Outlook:

  • Operating margin is expected to improve by 5ppts in 4Q22E, driven by cost control and S&M efficiency.
  • Adjusted net margin is forecasted to improve from -40.1% in 2Q22 to -9.5% in FY24E.

Strategic Outlook

• Short-Term Challenges:

  • Macro uncertainty and the lingering effects of the pandemic may hinder top-line recovery.
  • Content delays could impact subscription growth in the short term.

• Long-Term Potential:

  • The company is expected to benefit from a vibrant ecosystem and unique community, which support user expansion and monetization.
  • Story mode ads are anticipated to bring higher eCPM (30% above regular ads), offering growth potential.

• Revisions:

  • Topline forecast was cut by 4% for FY22-24E due to macroeconomic headwinds.
  • Target price was trimmed to US$35, down from US$40.

Financial Summary

Revenue Trends

• FY20A: RMB11,999mn
• FY21A: RMB19,384mn
• FY22E: RMB21,975mn
• FY23E: RMB26,672mn
• FY24E: RMB32,143mn
• YoY growth: 77% (FY20A), 62% (FY21A), 13% (FY22E), 21% (FY23E), 21% (FY24E)

Adjusted Net Profit

• FY20A: -RMB2,580mn
• FY21A: +RMB5,127mn
• FY22E: -RMB7,022mn
• FY23E: -RMB5,463mn
• FY24E: -RMB3,055mn

Adjusted EPS (RMB)

• FY20A: -7.46
• FY21A: -13.73
• FY22E: -17.41
• FY23E: -13.41
• FY24E: -6.52

P/S Ratio

• FY20A: 4.3x
• FY21A: 2.6x
• FY22E: 2.3x
• FY23E: 1.9x
• FY24E: 1.6x

Analyst Ratings

• CMBIGM Rating: BUY
• Target Price: US$35 (down from US$40)
• Up/Downside: +74.1% from current price of US$20.1

Key Ratios

Shareholding and Performance

• Shareholding Structure:

  • FMR LLC: 6.35%
  • Alibaba Group Holding Ltd: 3.26%
  • Yiheng Capital: 3.05%

• Share Performance:

  • 1-month: -7.2%
  • 3-months: +4.7%
  • 6-months: -35.7%

• 12-month Price Performance:

  • Refer to the attached chart from Bloomberg.

Risk and Disclaimer

• The report contains forward-looking statements and estimates which may not materialize.
• CMBIGM does not provide personalized investment advice and recommends consulting a professional financial advisor.
• The information is not guaranteed and is subject to change.
• CMBIGM may have conflicts of interest due to market-making or investment banking activities with the companies mentioned.
• This report is intended for specific recipients and may not be shared without consent.

Additional Information

• Auditor: PwC
• Related Reports:
  • The worst is over (20 Jul 2022)
  • Better margin and ads recovery ahead (10 Jun 2022)
  • Factoring in epidemic impact (4 May 2022)

Legal and Distribution Notes

• United Kingdom: Report is for Article 19(5) and Article 49(2)(a)-(d) investors.
• United States: Report is for major US institutional investors only.
• Singapore: Report is distributed by CMBISG, an Exempt Financial Adviser, and is subject to Singapore law. Contact CMBISG at +65 6350 4400 for further details.