Daiwa: Raises Bilibili target price to 250 yuan, reiterates "Buy" rating

Daiwa published a research report indicating that Bilibili-W (09626.HK) will see its advertising revenue grow at an accelerated rate of 27% year-on-year in the fourth quarter of 2025, driven by increased advertising budgets and efficiency improvements from artificial intelligence-related advertisers. The advertising budget for AI-related ads is expected to grow by 180% year-on-year in the fourth quarter of 2025, with momentum continuing into the first quarter of 2026.

In addition to Bilibili's continued advantages in traditional strong verticals, the firm is pleased to see emerging verticals such as education and home decoration gaining market attention. In the fourth quarter of 2025, Bilibili will release more advertising inventory in search, PC, internet TV, and mini-programs, with advertising spending in all these areas recording over 60% year-on-year growth. Daily active users grew by 10% year-on-year to 113 million, marking the fifth consecutive quarter of accelerating growth. Given the enhanced targeting capabilities driven by artificial intelligence, the still low ad loading rates, and a maturing user base with increasing purchasing power, the firm remains optimistic, predicting a 28% year-on-year growth in advertising revenue for the first quarter of 2026.

Daiwa has lowered its earnings per share forecast for Bilibili for 2026 to 2027 by 9% and 11%, respectively, to reflect increased investments in artificial intelligence. The "Buy" rating is reiterated, with the target price raised from 245 yuan to 250 yuan, equivalent to a projected price-to-earnings ratio of 35 times (previously 31 times)