Guoxin Securities: Maintains BiliBili-W "Outperform" Rating as Company Increases AI Investment Efforts

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Guoxin Securities released a research report maintaining an “Outperform” rating for Bilibili-W (09626). Bilibili’s advertising business continues to benefit from the release of potential inventory and increasing demand in gaming, AI applications, and other industries. The firm adjusted its revenue forecasts for 2026-2027 to 33.7/37.3 billion yuan, an increase of +3.2%/+2.2%, and added a forecast of 41.2 billion yuan for 2028. The adjusted net profit for 2026-2027 is estimated at 3.3/4.2 billion yuan, mainly due to increased AI-related capital expenditures and recruitment of top talent. The forecast for 2028 net profit is 5.3 billion yuan.

Guoxin Securities’ main points are as follows:

Strong Revenue Growth This Quarter

In this quarter, the company achieved operating revenue of 8.321 billion yuan, up 8% year-over-year. Breaking it down: 1) Value-added services revenue was 3.3 billion yuan, up 6% YoY, with a steady revenue increase. The number of VIP members exceeded 25.3 million, estimated to have increased by 13% YoY. Charging services grew rapidly, with YoY growth exceeding 100%. 2) Advertising revenue was 3 billion yuan, up 27% YoY, mainly due to the release of potential ad inventory. Outside of information feed scenarios, advertising in search, PC screens, and mini-programs grew over 60% YoY, with some exceeding 200%. The ad eCPM continued to rise driven by technological upgrades. The top five advertising industries in Q4 are gaming, digital appliances, internet services, e-commerce, and automotive. Q4 advertising is expected to benefit from increased demand driven by AI application competition and the instant retail boom. 3) Gaming revenue was 1.5 billion yuan. Additionally, the self-developed buyout game “Escape from Duckov” launched in October 2025 sold over 3 million copies in the first three weeks, becoming one of the best-selling standalone games of the year in China and ranking third in history. The company is currently developing console and mobile versions to further explore IP potential. 4) IP derivatives and other revenues totaled 480 million yuan, up 3% YoY.

The company’s adjusted net profit was 880 million yuan, with an adjusted net profit margin of 11%, a 5 percentage point increase compared to the same period last year.

Adjusted operating profit was 840 million yuan, with an adjusted operating profit margin increasing from 6% to 10%. The adjusted net profit exceeds adjusted operating profit, partly due to gains from fair value changes in investments. The gross profit margin was 37%, up 1 percentage point YoY, mainly due to the rapid growth in advertising revenue driving operating leverage. The firm estimates that a 100 million yuan increase in advertising revenue would correspond to about 50 million yuan in additional operating profit. Notably, management stated that part of the incremental profit for the year will be invested in AI, mainly to enhance creator productivity and optimize content recommendation efficiency.

Shareholder Returns

In this quarter, the company repurchased $14.7 million worth of stock. Since November 2024, it has repurchased a total of $131 million worth of stock, with remaining repurchase capacity of approximately $70 million.

Risk Warnings

Operational uncertainties caused by organizational restructuring, systemic macroeconomic risks, etc.

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Editor: Shi Lijun