Jingu Finance News | The china international capital corporation issued research reports stating that bilibili (09626) achieved Non-GAAP profit for the first time in the 2024Q3 performance, with outstanding growth in advertising business. Thanks to the strong performance of games like 'San Miao', the company's advertising revenue increased by 28% year-on-year, reaching 2.09 billion yuan, with performance advertising revenue growing at nearly 50% year-on-year. The company not only maintained growth in traditional advantages such as games but also actively explored new industry opportunities. During the 'singles' day sales' period, the company's GMV of goods increased by 154% year-on-year, with advertising revenue growing by over 50%. Looking forward to Q4, the company holds an optimistic view on the continued healthy growth of advertising revenue. china international capital corporation believes that with the gradual improvement of the company's commercial infrastructure, if there is improvement in the macro environment in 2025 and the company's advertising commercialization capabilities continue to improve, the advertising business is expected to achieve healthy growth.

The bank pointed out that in terms of the gaming business, benefiting from the outstanding performance of 'San Miao', the 2024Q3 revenue increased by 84% year-on-year, reaching 18.2 billion yuan. This game has entered the top three of the iOS bestseller list for three consecutive quarters. The company plans to release an overseas version of 'San Miao' in 2H25, and it is recommended to pay attention to the sustainability of its subsequent revenue. In terms of value-added services, the 2024Q3 revenue increased by 8.7% year-on-year, reaching 2.821 billion yuan. In terms of gross profit, the 2024Q3 gross margin increased by 10 percentage points year-on-year, reaching 35%, laying a solid foundation for profitability. At the same time, the sales/management/development expense ratios decreased by 0.2/1.6/5.9 percentage points to 16.9%/7.0%/12.5%. The net cash flow from operating activities in 2024Q3 was 2.225 billion yuan. The company announced at the earnings conference that it will continue to focus on the two core businesses of advertising and gaming in the future, and attach importance to the positive feedback loop between content and commercial growth. In addition, the company also announced a plan to repurchase stocks worth no more than 0.2 billion US dollars over the next 24 months, demonstrating confidence in shareholder returns and long-term development.

In terms of profit forecasts and valuation, considering the investment in Q4 sales expenses, the bank adjusted the 2024 Non-GAAP net loss to 90.21 million yuan and maintained the 2025 Non-GAAP net profit forecast at 2.68 billion yuan. The bank maintained the rating of bilibili as 'outperforming the industry' and, considering the changes in the revenue structure in 2025, lowered the Hong Kong stock target price by 1.1% to 188 Hong Kong dollars and the US stock target price by 4% to 24 US dollars.