Golden Finance News | Orient Securities issued a research report, Bilibili (09626) 3Q24 reached 7.31 billion yuan (yoy +26%, qoq +19%), driven by advertising and gaming business, the company's main growth. 3Q24 gross margin reached 34.9% (yoy +9.9pp, qoq +5.6pp). 3Q24 sales expenses were 1.202 billion yuan (yoy +21%, qoq +16%), management expenses were 0.505 billion yuan (yoy +1%, qoq +4%), research and development expenses were 0.906 billion yuan (yoy -15%, qoq +1%). 3Q24 Non-Gaap operating profit was 0.272 billion yuan, turning positive for the first time. The bank expects 3Q24 Non-Gaap operating profit to reach 0.4 billion yuan. 3Q24 Non-Gaap net income attributable to mother reached 0.236 billion yuan (compared to a Non-Gaap net loss of 0.88 billion yuan in the same period last year).

The bank pointed out that the company's advertising revenue in 3Q24 reached 2.09 billion yuan (yoy +28%, qoq +3%), accounting for 29% of the overall revenue, up from 27% in the same period last year, effectively driving the increase in the company's gross profit. Supply side: stable growth of Daily Active Users (DAU) combined with the continuous integration of commercialized products, continuously improving monetization efficiency. Demand side: as Bilibili users mature, their consumption capabilities are rapidly increasing. Games, e-commerce, digital home appliances, online services, and autos have become the top five industries contributing to advertising revenue. Emerging industries such as education, maternity and baby, and cultural tourism have seen rapid growth in advertising revenue, with a year-on-year growth of over 100%. The company's e-commerce has always adhered to the "open ecosystem" global strategy, bringing in new customer rates of over 50% for all vertical industries. During the "November 11 shopping festival-related" period, Bilibili's GMV for products grew rapidly by 154% compared to the same period the previous year, and the number of advertisers was 6.6 times that of the same period last year. The bank expects Q4 revenue to reach 2.4 billion (yoy +24%, qoq +14%).

The bank stated that the company's new game "Three Kingdoms: Seize the Crown" performed better than expected, expected to drive high growth in gaming; advertising supply-side traffic growth, ad load increase, and demand-side user age growth commercialization capabilities release. The bank expects the company's revenues for 24-26 to be 26.8/31.5/34.1 billion yuan, with original forecasts of 26.8/30/31.7 billion yuan. Due to the game "Three Kingdoms: Seize the Crown" exceeding expectations, the revenue forecast has been revised upwards. Based on the adjusted PS average of comparable companies in 24, the target price is set at 166.43HKD (153.73CNY), with an exchange rate of HKD/CNY=0.92, maintaining a "buy" rating.