Jinwu Finance | bocom intl released a research report stating that bilibili (09626) will have a revenue of 7.3 billion yuan (RMB, the same below) in the third quarter of 2024, experiencing accelerating growth both year-on-year and quarter-on-quarter (26%/19%, compared to 16%/8% in the second quarter), which is basically in line with the bank and market expectations. Adjusted for operational aspects, a profit of 0.27 billion yuan has been achieved, better than the bank/market expectations of 0.23/0.19 billion yuan. In the third quarter, "Sanmou" drove game revenue growth of 84% year-on-year, and advertising revenue grew by 28% year-on-year, with effective advertising revenue increasing by nearly 50% year-on-year.

Looking ahead to the fourth quarter, the bank expects game revenue to maintain rapid growth, increasing by 75% year-on-year, mainly considering the overseas launch of "Jujutsu Kaisen" and the start of season 4 of "Sanmou". Advertising revenue is expected to grow by 24% year-on-year, benefiting from product optimization, gradual release of cross-scenario advertising inventory, and e-commerce promotions. The gross margin for the fourth quarter is expected to be 36%, with adjusted operational profit of 0.4 billion yuan.

The bank has raised its adjusted net income forecast for 2025 by 8% to 1.9 billion yuan. Given that the company is still in the early stages of profitability, maintaining a target price of 25 USD/194 HKD based on a 2.5 times p/s for 2025, and keeping a buy rating.