Chinese video streaming platform Bilibili Q2 revenue up 20%, swings to profit

Overview

• Bilibili Q2 revenue rises 20% yr/yr to RMB7.34 bln (US$1,024.3 million)

• Net profit of RMB218.3 mln (US$30.5 million) vs. net loss last year

• Co repurchased 5.6 mln Class Z shares

Outlook

• Bilibili aims to enhance content ecosystem with notes offering proceeds

• Company focuses on premium content to drive user growth

• Bilibili plans to improve monetization efficiency

• Company to maintain efficient, sustainable, profitable operations

Result Drivers

• ADVERTISING GROWTH - Advertising revenues increased by 20% year over year, driven by strong performance-based advertising

• MOBILE GAMES - Mobile games revenues surged 60% year over year, attributed to the success of the exclusively licensed game, San Guo: Mou Ding Tian Xia

• GROSS PROFIT IMPROVEMENT - Gross profit rose 46% year over year, with a higher gross profit margin due to stable platform operation costs and enhanced monetization efficiency

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 18 "strong buy" or "buy", 2 "hold" and 1 "sell" or "strong sell"

• The average consensus recommendation for the online services peer group is "buy"

• Wall Street's median 12-month price target for Bilibili Inc is HK$211.00, about 6.7% above its August 21 closing price of HK$196.80

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