Equity Analyst, LightStream Research

Shifara Samsudeen, ACMA, CGMA

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/bilibili-inc" target="_blank" data-smartkarma-citation="entities:26793:1" rel="noopener">Bilibili Inc (BILI US)</a> ’s 1Q2023 top line growth remained flat (+0.3%) while cost control measures helped reduce losses. This marks the lowest quarterly revenue growth for the company since 2017.</li>
<li>Mobile games revenue further decreased while Value Added Services (VAS) revenue growth dropped to 5.1% during the quarter, lowest ever for the segment.</li>
<li>There was no disclosure on paying user numbers and we do not expect any significant recovery in top line growth over the next 2-3 quarters.</li>
</ul>



Bilibili Inc (BILI US) ’s 1Q2023 top line growth remained flat (+0.3%) while cost control measures helped reduce losses. This marks the lowest quarterly revenue growth for the company since 2017.
Mobile games revenue further decreased while Value Added Services (VAS) revenue growth dropped to 5.1% during the quarter, lowest ever for the segment.
There was no disclosure on paying user numbers and we do not expect any significant recovery in top line growth over the next 2-3 quarters.


Bilibili: Mobile Game Further Declines and VAS Slowing Down; Cost Controls Help Reduce Losses

China/Asia TMT

Shawn Yang

China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

Thematic (Sector/Industry)

<ul>
<li>700.HK/NTES/BILI: Tencent, NetEase and Bilibili receive game code approvals (+)</li>
<li>ZLAB：First generic version of Olaparib approved in China but impact on Nariparib should be small（/）</li>
<li>MNSO: Miniso opened its global flagship store in NY Times Square with 78k sales in first day</li>
</ul>


700.HK/NTES/BILI: Tencent, NetEase and Bilibili receive game code approvals (+)
ZLAB：First generic version of Olaparib approved in China but impact on Nariparib should be small（/）
MNSO: Miniso opened its global flagship store in NY Times Square with 78k sales in first day


China TMT Update(May 24) - 700.HK/NTES/BILI/ZLAB/MNSO: Tencent, NetEase, Bilibili Receive Game Code

<ul>
<li>BZ: Kanzhun Limited: China State Council issued a series of policies to stabilize employment market.(+)</li>
<li>BILI/1024HK/3690HK: New Internet ads measures take effect since May 1(-/-/+)</li>
<li>3690 HK: RED preparing to launch group buying function (-)</li>
</ul>


BZ: Kanzhun Limited: China State Council issued a series of policies to stabilize employment market.(+)
BILI/1024HK/3690HK: New Internet ads measures take effect since May 1(-/-/+)
3690 HK: RED preparing to launch group buying function (-)


China TMT Update(Apr.28)-BZ/BILI/1024/3690HK: RED Preparing to Launch Group Buying Function (-)

<ul>
<li>We estimate that BILI’s 1Q23 rev./adj. net income are 3%/11% vs cons. </li>
<li>We raise gaming/ads revenue starting from 2Q23 because of 1) an increasing number of newly approved games; and 2) increasing possibilities that pre-roll ads could be launched. </li>
<li>Yet, we still maintain SELL rating and TP unchanged because of concerns about its content ecosystem. Our TP implies 1.7X PS in 2023.</li>
</ul>


We estimate that BILI’s 1Q23 rev./adj. net income are 3%/11% vs cons. 
We raise gaming/ads revenue starting from 2Q23 because of 1) an increasing number of newly approved games; and 2) increasing possibilities that pre-roll ads could be launched. 
Yet, we still maintain SELL rating and TP unchanged because of concerns about its content ecosystem. Our TP implies 1.7X PS in 2023.


[Bilibili Inc. (BILI US, SELL, TP US$15.4)]: Long-Term Challenge Exists Amid Short-Term Catalysts

<ul>
<li>BILI/ 700 HK: April domestic game codes published by NPPA</li>
<li>JD/ PDD/ BABA/JDL: JD commits to maintain its low-price strategy</li>
<li>BABA/PDD/JD/VIPS: Taobao cancels fees and adjusts algorithm for upcoming “Super Cost-effective Event”</li>
</ul>


BILI/ 700 HK: April domestic game codes published by NPPA
JD/ PDD/ BABA/JDL: JD commits to maintain its low-price strategy
BABA/PDD/JD/VIPS: Taobao cancels fees and adjusts algorithm for upcoming “Super Cost-effective Event”


Baba/Pdd/Jd/Vips/BILI/700 HK/JDL: China TMT Update(Apr.24) - Taobao Cancels Fees for Promotion Event

China

Bilibili Inc. provides online entertainment services. The Company offers a platform that covers a wide array of genres and media formats, including videos, live broadcasting, mobile games, animation, and comics. Bilibili serves customers in China.

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Bilibili (BILI US)

Bilibili: Mobile Game Further Declines and VAS Slowing Down; Cost Controls Help Reduce Losses

Top line growth was flat and VAS revenue grew +5% which is the lowest ever. no disclosure on paying users but our regression model shows MPUs have...

Shifara Samsudeen, ACMA, CGMA

China TMT Update(May 24) - 700.HK/NTES/BILI/ZLAB/MNSO: Tencent, NetEase, Bilibili Receive Game Code

700.HK/NTES/BILI: Tencent, NetEase and Bilibili receive game code (+)；ZLAB：First generic version of Olaparib approved in China（/）；MNSO: Miniso...

Blue Lotus Research Institute

China TMT Update(Apr.28)-BZ/BILI/1024/3690HK: RED Preparing to Launch Group Buying Function (-)

BZ: State Council issued policies to stabilize employment market; BILI/1024HK/3690HK: New Internet ads measures take effect since May ; 3690HK: RED...

Blue Lotus Research Institute

[Bilibili Inc. (BILI US, SELL, TP US$15.4)]: Long-Term Challenge Exists Amid Short-Term Catalysts

We raise gaming/ads revenue starting from 2Q23. Yet, we still maintain SELL rating and TP unchanged because of concerns about its content ecosystem.

Blue Lotus Research Institute

Baba/Pdd/Jd/Vips/BILI/700 HK/JDL: China TMT Update(Apr.24) - Taobao Cancels Fees for Promotion Event

BILI/700HK: April domestic game codes published by NPPA;JD/PDD/BABA/JDL: JD commits to maintain its low-price strategy; Taobao cancels fees for...

Blue Lotus Research Institute

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