20230303-招银国际-Evolving_to_a_self-sustained_business_model_7页_1mb

Bilibili (BILI US) Summary

Core Content and Key Highlights

Bilibili has announced its 4Q22 financial results, showing a revenue increase of 6% YoY to RMB6.1bn, in line with market expectations. The full-year revenue for 2022 reached RMB21.9bn, representing a 13% YoY growth. The company's adjusted net loss narrowed by 21% YoY to RMB1.3bn in 4Q22, better than the consensus estimate of RMB1.6bn, due to improved operating efficiency.

Main Revenue Segments in 4Q22

• VAS Revenue: Grew by 24% YoY to RMB2.4bn (38% of total revenue), primarily driven by live streaming revenue, which increased by over 30% YoY in FY22.
• Ad Revenue: Declined by 5% YoY to RMB1.5bn (25% of total revenue), impacted by macroeconomic headwinds and the effects of the pandemic. However, performance-based ad revenue grew by over 50% YoY.
• Mobile Games Revenue: Decreased by 12% YoY to RMB1.1bn (19% of total revenue). Self-developed games contributed 5% of games revenue in FY22, with management expecting this to rise in FY23E due to two new self-developed games launching in 2Q23.
• E-commerce and Others: Grew by over 13% YoY to RMB1.1bn (17% of total revenue), with a PS multiple of 2.7x for FY23E.

User Growth and Engagement

• Average MAUs: Increased by 20% YoY to 326mn in 4Q22, with a DAU/MAU ratio of 28.5% (up 2pct YoY).
• Average Daily Time Spent: Rose by 17% YoY to 96 minutes, attributed to the growth of PUGV content and video consumption scenarios like Story Mode.
• Total Video Views: PUGV and Story Mode grew by over 50% and 170% YoY in 4Q22, respectively.

Cost Optimization and Profitability

• Gross Margin: Expanded by 1% YoY and 2% QoQ to 20.3% in 4Q22, with expectations of reaching mid-20% in FY23E.
• Adjusted Net Loss: Narrowed from RMB5.5bn in FY21 to RMB6.7bn in FY22, and is forecasted to decrease to RMB3.7bn in FY23E and RMB1.2bn in FY24E.
• Adjusted Net Loss Margin: Expected to narrow from 31% in FY22 to 15% in FY23E and 5% in FY24E.

Financial Forecast (FY23E–FY25E)

Valuation and Target Price

• Target Price: US$30.00 per ADS, implying 3.3x and 2.9x 2023E/2024E PS multiples.
• SOTP Valuation: Total valuation is RMB81,672mn, broken down into:
  • Advertising Business: US$11.5 (38.4% of total valuation), based on a 20x 2023E PE.
  • VAS Business: US$10.5 (34.9% of total valuation), based on a 2.7x 2023E EPS.
  • Mobile Games: US$7.6 (25.3% of total valuation), based on an 18x 2023E PE.
  • E-commerce: US$0.4 (1.4% of total valuation), based on a 0.5x 2023E PS.

Analyst Recommendations

• CMBIGM Rating: BUY
• Potential Return: Over 15% over the next 12 months
• Current Price: US$19.67
• Previous Target Price: US$29.50
• Up/Downside: 52.5%

Shareholding and Performance

• Market Cap: US$7,740.9mn

• Shareholding Structure:

  • Rui Chen: 12.6%
  • Tencent: 11.2%

• Share Performance:

  • 1-month: -25.1% (Absolute), -22.7% (Relative)
  • 3-month: 15.6% (Absolute), 15.8% (Relative)
  • 6-month: -20.7% (Absolute), -18.4% (Relative)

Peer Comparison

Online Games and Advertising

• Advertising: CMBIGM estimates a 20x 2023E PE, higher than the average of 13x for mature platforms.
• Mobile Games: CMBIGM estimates an 18x 2023E PE, lower than the industry average of 20x.

Online Video and E-commerce

• Online Video: CMBIGM estimates a 2.7x 2023E PS, in line with the average of other video platforms.
• E-commerce: CMBIGM estimates a 0.5x 2023E PS, in line with other e-commerce platforms.

Analyst Certification

• The research analyst certifies that the views expressed reflect personal opinions and that there is no financial interest in the covered securities.

CMBIG Ratings

• BUY: Stock with potential return of over 15% over next 12 months
• OUTPERFORM: Industry expected to outperform the relevant broad market benchmark over next 12 months
• MARKET-PERFORM: Industry expected to perform in-line with the relevant broad market benchmark over next 12 months
• UNDERPERFORM: Industry expected to underperform the relevant broad market benchmark over next 12 months

Key Focus Areas for FY23E

• Quality User Growth: Continued focus on growing the user base and improving DAU/MAU ratio.
• Monetization Improvement: Enhancing user monetization.
• Cost Optimization: Reducing costs and improving operating efficiency.