UBS wrote in a report that despite a challenging macro environment, BILIBILI-W (09626.HK) +6.500 (+5.845%) Short selling $100.34M; Ratio 21.085% (BILI.US) achieved a 31% YoY growth in advertising revenue in 1Q24, outperforming other online media peers. The broker expected the company's ad revenue to benefit from bottom-up improvements and favourable demand factors this year.
On the supply side, the number of video views on BILIBILI grew 22% YoY in 1Q. On the demand side, UBS expected the company to be well-positioned to support its game advertising spending amidst fierce competition in the game market, and its partnership with e-commerce platforms is expected to expedite the monetisation of user traffic.
UBS forecasted BILIBILI's advertising revenue to account for 53% of its total gross profit this year, excluding management fees, surpassing games as the company's main source of revenue. The broker raised its revenue forecast for this year by 1% to reflect the growth in advertising and mobile games. Adjusted net loss is expected to be RMB508 million, 29% narrower than before, due to a higher revenue mix of high-margin advertisements and games, which in turn improved gross profit margins. The broker also elevated its EPS forecast for 2024-26 by 19-39%.
UBS hiked its target price for BILIBILI's Hong Kong shares from HK$92.9 to HK$141 and that for BILIBILI's US shares from US$11.9 to US$18. The broker upgraded the company's rating from Neutral to Buy.
(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2024-06-03 16:25.) (Real-time Streaming US Stocks Quote; Except All OTC quotes are at least 15 minutes delayed.)
