Event: Bilibili Inc. 's 4Q22 net income was 6.142 billion yuan, an increase of 6% over the same period last year, with an adjusted net loss of 1.312 billion yuan, and a net loss of 1.652 billion yuan in the same period last year, slightly higher than the market consensus.
User stickiness is significantly improved. The total MAU and DAU of 4Q22 Bilibili Inc. increased 20% and 29% year-on-year to 326 million and 93 million respectively, DAU/MAU increased 1.9pct to 28.5% year-on-year, the average daily use time of a single DAU increased by 17.1% year-on-year to 96 minutes, the total user time increased by 51% year-on-year, and user activity increased rapidly.
The supply of limited game revenue is under short-term pressure, and the effect advertising revenue is growing rapidly. The revenue of 4Q22's mobile game business reached 1.146 billion yuan, down 12% from the same period last year, mainly due to the small number of mobile games launched by the company 4Q22, and the pipeline performance was lower than that of the same period last year. In the first half of 23, the company expects to launch 2 games in China and 6 games overseas. With the normalization of the release of version numbers, the company's game business will be in a more stable development environment, and revenue is expected to resume steady growth. The advertising revenue of 4Q22 Company was 1.512 billion yuan, down 5% from the same period last year, of which the revenue from effective advertising increased by more than 50% over the same period last year, mainly due to the good transformation of new advertising scenarios built by Story-Mode and brand recommendations.
Focus on the improvement of users' business value, and the gross profit margin continues to improve. 4Q22 achieved 2.35 billion yuan in value-added services, an increase of 24% over the same period last year. The company provides users with a full range of value-added services, including exclusive copyright videos, live streaming, comics and audio dramas. The scale of paying users is growing steadily. The average monthly paying users of the 4Q22 platform is 28 million, an increase of 15% over the same period last year, of which the number of monthly paid users for live streaming has increased by more than 40%. In terms of expenses, 4Q22's gross profit margin increased to 20.6% compared with the same period last year, sales expenses were 1.266 billion yuan, down 28% from the same period last year, and the corresponding sales expense rate was reduced by 9.5pct to 20%. In the future, the company will pay more attention to the quality of revenue growth and reduce losses, focus on high gross margin business, and expect that there will be room for continuous improvement in gross profit margin.
Profit forecast and investment advice: revenue in 2025 is expected to be 25330367 billion yuan, + 16%, 22%, 19%, and adjusted net profit-$1.4 billion, maintaining the "buy" rating.
Risk tips: commercialization is not as expected, user growth is not as expected, and policy regulatory risks.