Jingu Financial News | Bocom Intl releases Bilibili (09626) third-quarter performance outlook, slightly raises 2024 Q3 revenue by 1% to 7.3 billion yuan (RMB, the same below), a 26% year-on-year increase. The bank expects gross margin to increase to 34%, due to the continuous release of operating leverage and the increase in the proportion of game/advertising revenue. Maintains Q3 profit expectations, with an estimated adjusted net income of 0.28 billion yuan.

The bank slightly raised its game revenue expectations: 'Three Strategies' Q3 revenue exceeded 1.3 billion yuan, better than the bank's previous expectations. Slightly raised Q3/2024 game revenue to 1.9/5.6 billion yuan, corresponding to year-on-year growth rates of 92%/40%. Overseas new games may be released this year, potentially driving growth in overseas game revenue.

The bank maintains expectations for a 25% increase in advertising/VAS revenue in Q3, bullish on the improvement of advertising infrastructure, continuous release of product/technology iteration effects, and the expansion of e-commerce transactions driving advertising revenue.

The bank raises its 2025 revenue and adjusted net income expectations by 3%/42%. Based on a comparable average market-to-sales ratio of 2.5 times for entertainment companies in 2025, the target price is raised to $25/194 HKD (originally $19/$155 HKD), maintaining a buy recommendation.