According to a research report by Bank of America Securities, bilibili (09626.HK)(BILI.US) exceeded expectations in its third quarter performance due to strong results in gaming. The firm believes there is room for growth in the company's advertising business, which will open an ecosystem in e-commerce video and live-stream advertising, and plans to collaborate with e-commerce platforms and brands for joint promotion strategies to attract more advertising budget. Additionally, the firm indicated that profit trends will become a key driver of stock prices after reaching breakeven. It believes that the transformation to gaming and advertising business along with cost improvements will help achieve a net profit margin of over 10% or an operating profit margin of about 15% in the long term.

After the third quarter performance exceeded expectations, the firm adjusted its earnings per share forecast for 2024 to 2026 upward by 1% to 6%, forecasting that 2025 will be the first year to achieve profitability. It raised the target price for bilibili (09626.HK) from 176 yuan to 180 yuan and the target price for bilibili (BILI.US) from 22.5 dollars to 23 dollars, reiterating the 'buy' rating. (vc/w)

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