Guosen Securities Maintains "Outperform" Rating on BILIBILI-W (09626) as Profitability Accelerates in Q3 2025

Stock News11-20

Guosen Securities issued a research report expressing optimism about BILIBILI-W's (09626) commercial potential and maintaining an "Outperform" rating. Bilibili reported revenue of RMB 7.69 billion, with net profit showing significant year-on-year growth and accelerating profitability. User engagement reached a record high, driving strong advertising performance, with Q3 revenue up 23% YoY, of which AI-generated ad creatives accounted for 55%. In gaming, the new title Escape from Duckov surpassed 3 million global sales, demonstrating solid growth momentum.

Key highlights from Guosen Securities include: - **Q3 High Profit Growth**: For the first three quarters of 2025, revenue reached RMB 22.026 billion (+15.34% YoY), gross profit rose 34.2% to RMB 8.033 billion, and net profit attributable to shareholders hit RMB 680 million. Adjusted net profit stood at RMB 1.712 billion, while operating cash flow improved to RMB 5.308 billion (vs. RMB 4.614 billion YoY). Q3 revenue grew 5% YoY and QoQ to RMB 7.69 billion, with adjusted net profit surging 233% YoY and 40% QoQ to RMB 786 million, reflecting accelerating profitability.

- **User Growth & Stickiness**: Monthly active users (MAU) and daily active users (DAU) hit record highs of 376 million (+8% YoY) and 117 million (+9% YoY), respectively. Average daily usage per user rose 6% YoY to 112 minutes, while paying users grew 17% YoY to 35 million.

- **Advertising Momentum**: Advertising revenue for Q1–Q3 reached RMB 4.45 billion (+20% YoY), driven by performance-based ads (+30% YoY). Q3 ad revenue accelerated to RMB 2.57 billion (+23% YoY), with AI-generated creatives contributing 55% of ad spend and boosting efficiency by over 10%. Top ad verticals were gaming, internet services, electronics, e-commerce, and automotive, reflecting improving monetization potential.

- **Gaming & Value-Added Services**: Escape from Duckov exceeded 3 million global sales, while Three Kingdoms: Hundred Generations is slated for Q1 2026. Value-added service revenue grew 7% YoY in Q3 to RMB 3.023 billion, supported by steady growth in premium memberships and live streaming.

**Investment Recommendation**: Guosen Securities raised its profit forecasts, expecting 2025/26/27 net profit of RMB 1.223/2.041/3.251 billion (prior: RMB 756 million/1.761 billion/2.942 billion) and adjusted net profit of RMB 2.548/3.366/4.576 billion (prior: RMB 2.081/3.086/4.269 billion), implying 31/24/17x forward P/E. The firm cites Bilibili’s strong community, AI-driven growth in ads/gaming, and attractive valuation upside, maintaining an "Outperform" rating.

**Risks**: Slower user growth, commercialization delays, regulatory changes, and higher content costs.

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