20210726-招银国际-Users_on_track_while_investment_continues_4页_839kb

Bilibili (BILI US) Equity Research Summary

Core Content Overview

This report provides an equity research update on Bilibili (BILI US), analyzing its financial performance, user growth, and future outlook. The analysis is conducted by CMB International Securities, with a focus on revenue trends, margin pressures, and stock valuation.

Key Financial Forecast

• Revenue Growth:

  • 2Q21E: +63% YoY (slightly below consensus)
  • FY21E: +77% YoY
  • FY22E: +59% YoY
  • FY23E: +39% YoY

• Adj. Net Profit:

  • 2Q21E: -RMB1.1bn (vs. consensus at -RMB1.0bn)
  • FY21E: -RMB5.26bn
  • FY22E: -RMB4.66bn
  • FY23E: -RMB4.37bn

• Earnings Per Share (EPS):

  • 2Q21E: -RMB3.31
  • FY21E: -RMB15.26
  • FY22E: -RMB13.39

• Price-to-Sales (P/S) Ratio:

  • FY21E: 12.3x
  • FY22E: 8.8x
  • FY23E: 6.7x

• Target Price (TP):

  • Maintained at US$142 (down from US$154)
  • 12-month upside: +49.1% from current price of US$95.2

Revenue Breakdown

• Mobile Games:

  • 2Q21E: RMB4,268mn (flat QoQ)
  • 3Q21E: Expected to grow by +24% YoY
  • 4Q21E: Expected to grow by +63% YoY

• Live Broadcasting & VAS:

  • 2Q21E: RMB1,670mn (+11.6% QoQ, +102.4% YoY)

• Advertising:

  • 2Q21E: RMB890mn (+24.5% QoQ, +155.3% YoY)

• E-commerce & Others:

  • 2Q21E: RMB1,610mn (+161.3% YoY)

User Trends

• MAU (Monthly Active Users):
  • 2Q21E: Forecast at 226mn (+32% YoY, +1% QoQ)
  • Long-term MAU target remains intact
  • Management is confident in reaching 260mn MAU by 2H21E

Margin Analysis

• Gross Margin:

  • 2Q21E: 22% (down 2ppts QoQ due to lower contribution from games and content incentives)
  • FY21E: 26.3%
  • FY22E: 29.9%
  • FY23E: Expected to stabilize

• Operating Margin:

  • 2Q21E: -29% (down from -27% in 1Q21)
  • FY21E: -24.8%
  • FY22E: -18.9%

• Adj. Net Margin:

  • 2Q21E: -26%
  • FY21E: -22.9%
  • FY22E: -19.8%

Investment & Operational Highlights

• Content Investment:

  • Increased content cost and investment are expected to weigh on margins
  • Management is focusing on long-term monetization enhancement

• Stock Performance:

  • 1-month: -21.7%
  • 3-month: -18.4%
  • 6-month: -28.8%
  • 12-month: -24.2% relative to the market

Key Ratios and Metrics

• Sales Mix:

  • Mobile games: 30.3% (FY21E)
  • Live broadcasting & VAS: 36.9% (FY21E)
  • Advertising: 21.4% (FY21E)
  • Others: 11.4% (FY21E)

• ROE:

  • FY21E: 22.0%
  • FY20A: 38.6%
  • FY19A: -16.6%

• ROA:

  • FY21E: 10.0%
  • FY20A: 10.8%
  • FY19A: -7.0%

Analyst Recommendations

• Rating: BUY (maintained)
• Reasoning: Despite margin pressures and sector headwinds, the long-term user trend and monetization enhancement are expected to drive value
• Reasons for Lowering TP: Sector de-rating and livestreaming regulation headwinds

Shareholding and Stock Data

• Market Cap: US$36,595mn
• Average 3-Month Turnover: US$456.78mn
• 52-Week High/Low: US$157.7 / US$39.7
• Total Issued Shares: 301mn

Shareholding Structure

• Capital Group: 3.92%
• FMR LLC: 3.83%
• Alibaba Group: 3.33%

Summary of Key Points

• Bilibili's revenue is expected to grow significantly, though margins are under pressure due to increased content investment and lower game revenue.
• MAU is on track and expected to reach 260mn in 2H21E.
• Non-game businesses (ads, e-commerce, VAS) are expected to outperform.
• Analysts maintain a BUY rating, with a revised target price of US$142.
• The stock has experienced volatility, but long-term growth potential is still viewed positively.
• The report highlights the importance of content cost and investment in margin pressures.