According to the Daiwa report, bilibili (09626.HK)(BILI.US) has risen by 97% in the past 30 days, significantly higher than the 40% increase of the KraneShares CSI China Internet ETF. The stock is valued at a forecasted price-to-earnings growth rate of 4.6 times for the next year, which is 1.2 standard deviations higher than the three-year average, and similar to the five-year average. Based on the stock's volatility, it is considered not the time to buy currently, as its fundamental improvement needs to be verified over time.

The bank has raised its earnings per share forecast for the company by 24% to 52% for the next two years, mainly due to improvements in revenue mix and clear progress in profit capabilities. The target price for the ADRs on the US stock market has been raised from $17 to $28.5. However, the rating has been downgraded from 'Outperform' to 'Hold'.

The bank remains optimistic about the company's profit margin improvement in the second half of the year, driven by strong growth in advertising and the revitalization of gaming. It is also optimistic about the sustainability and differentiation of the company's gaming, especially the 'Three Kingdoms' game, based on gaming innovation, its light monetization model, and its coverage of young players.