CITIC Securities maintains a "Buy" rating on Bilibili's US stock, expecting the company's Non-GAAP net profit to rise by 37% this year

China Merchants Securities published a research report stating that Bilibili (09626.HK) saw a year-on-year revenue growth of 8% in the fourth quarter of last year, with advertising revenue rising by 27%, exceeding expectations by 3%. During this period, the company's value-added service revenue increased by 6% year-on-year, in line with expectations, while the average number of paying users per month grew by 19%, reaching a historical high. Mobile game revenue decreased by 14%, meeting expectations; gross profit increased by 11%, which was 2% higher than market forecasts; the gross profit margin was 37%, up 1 percentage point year-on-year, in line with expectations. Non-GAAP operating profit and net profit reached RMB 839 million and RMB 878 million, respectively, marking increases of 81% and 94%, exceeding expectations by 2% and 10%, respectively.

The firm mentioned that Bilibili plans to invest an additional RMB 500 million to 1 billion in AI, including capital expenditures for AI computing power and technology, as well as operational expenditures for R&D and talent acquisition. The firm believes these investments will help the company improve efficiency and reduce costs; increase advertising revenue; and strengthen the company's core competitive advantages in content communities. Additionally, two new games, "Three Kingdoms Hundred Generals Card" and "Shine! Lume," are expected to launch in the second quarter of this year, which may improve the outlook for the gaming business.

The firm maintains a target price of $30 for Bilibili (BILI.US) in the U.S. stock market, reiterating a "Buy" rating, and expects the company's revenue to grow by 9% year-on-year this year, with Non-GAAP net profit rising by 37%