I'm LongbridgeAI, I can summarize articles.JPMorgan cut Bilibili's target price to HKD170 and US$22, reiterating an Overweight rating. The downgrade reflects sector valuation de-rating, with the P/E multiple reduced from 24x to 16x. Key positives include the removal of shareholder placement overhang after Tencent converted stakes into convertible bonds and an upcoming new game launch cycle starting late 2026. JPM maintained its top pick status in digital entertainment, citing expected 31% annual earnings growth through 2028 despite lowering near-term revenue and profit forecasts due to slower ad growth and higher user acquisition costs.
JPM released a report stating that shareholder placement overhang at BILIBILI-W (also known as B Station) (09626.HK) +0.900 (+0.727%) Short selling $462.28M; Ratio 10.124% has been removed, while a new game launch cycle is approaching. The broker named the company as its top pick in digital entertainment, replacing NTES (09999.HK) +1.500 (+0.799%) Short selling $259.59M; Ratio 19.037% . JPM maintained an "Overweight" rating on B Station, but lowered its target valuation multiple from a projected 2027 price-to-earnings ratio of 24x to 16x to reflect sector-wide valuation de-rating among mainland China's digital entertainment peers. Accordingly, the H-share TP was cut from HKD270 to HKD170, while the US stock TP for Bilibili Inc. (BILI.US) was reduced from USD35 to USD22. The broker believes the company deserves a valuation premium over peers as its earnings growth is expected to reach 31% annually during 2027-2028.
JPM said B Station's share price has been under pressure YTD mainly due to concerns over potential shareholder disposals, AI investment dragging on earnings, declining gaming revenue and slowing advertising revenue growth. However, following recent equity and convertible note transactions, TENCENT (00700.HK) -0.800 (-0.182%) Short selling $668.37M; Ratio 14.556% has converted about a 9% stake into USD200 million convertible bonds, eliminating the risk of further stake reduction. The company is expected to enter a new game launch cycle from Sep 2026, with two to three new games planned for 2026 and 2027 respectively. Gaming revenue YoY growth is projected to turn positive in 4Q26, with 2027 growth estimated at 22%, compared with an 8% decline in 2026.
JPM lowered its 2026 and 2027 revenue forecasts by 1% and 2% respectively to reflect slower advertising revenue growth. Due to rising game user acquisition costs, the broker also cut its adjusted net profit margin forecasts for 2026 and 2027 by 0.1 ppts and 0.9 ppts respectively, while its 2027 EPS forecast was lowered by 8%. The next potential catalyst will be the global launch of "Shine On! Lumi" on 17 Sep 2026. (da/a)(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2026-09-07 16:25.) (Real-time Streaming US Stocks Quote; Except All OTC quotes are at least 15 minutes delayed.)