In "The Big Banks," Citigroup lowers Bilibili's target price to $24, as mobile game revenue exceeds expectations, offsetting weaker advertising revenue

Citi released a report indicating that Bilibili (BILI.US) achieved first-quarter results in 2025 that met expectations, with total revenue growing 23.6% year-on-year to RMB 7 billion, and adjusted EBITDA of RMB 342 million. The better-than-expected performance of mobile game revenue offset the lower-than-expected advertising revenue. Mobile game revenue surged 76% year-on-year, driven by the recent popular game "Romance of the Three Kingdoms" and the newly released "Jujutsu Kaisen: Phantom Parade." Advertising revenue grew 20% year-on-year, benefiting from strong advertising demand for games and 3C products, although the comparison base from the same period last year was relatively high.

Citi expects Bilibili to continue achieving a robust 20% year-on-year revenue growth in the second quarter of 2025, with profits of approximately RMB 550 million, but revenue growth in the second half of 2025 may slow to 10%, depending on the approval of new games. The firm lowered its target price from $25 to $24, as it reduced revenue forecasts for 2026 and 2027 by 4% and 7%, respectively, due to the company's ongoing wait for domestic approvals for new games. The rating is maintained at "Outperform."