Research Report Gold Mining | China Merchants Securities: Maintain "Buy" rating for Bilibili, new game launches expected to improve gaming business outlook

Gelonghui, March 9th｜CITIC Securities published a research report stating that Bilibili's revenue in the fourth quarter of last year increased by 8% year-on-year, with advertising revenue rising by 27%, exceeding expectations by 3%. Value-added service revenue grew by 6% year-on-year, in line with expectations, and the average monthly paying users increased by 19%, reaching a record high. Non-GAAP operating profit and net profit reached 839 million and 878 million yuan respectively, surging by 81% and 94%, which were 2% and 10% higher than expected. The firm mentioned that Bilibili plans to add 500 million to 1 billion yuan in AI investment, including capital investment in AI computing power and technology, as well as operational investment in R&D and talent acquisition. The firm believes these investments will help the company improve efficiency and save costs; increase advertising revenue; and strengthen the company's core competitive advantage in content communities. In addition, two new games, "Three Kingdoms: Hundred Generals" and "Shine! Lumi," are expected to be launched in the second quarter of this year, which could improve the outlook for the gaming business.