External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

Equity Bottom-Up

<ul><li>BiliBili reported 1Q23 results on 1 Jun. Total revenue was flat YoY at RMB5.1bn in 1Q23, in line with CMBI/consensus estimate.</li><li>Adjusted net loss narrowed by 38% YoY to RMB1.0bn in 1Q23, beating CMBI/consensus estimate by 6/10%.</li><li>The better-than-expected profitability was due to Bili’s strategy to prioritize quality user growth and monetization improvement. </li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

BiliBili reported 1Q23 results on 1 Jun. Total revenue was flat YoY at RMB5.1bn in 1Q23, in line with CMBI/consensus estimate.Adjusted net loss narrowed by 38% YoY to RMB1.0bn in 1Q23, beating CMBI/consensus estimate by 6/10%.The better-than-expected profitability was due to Bili’s strategy to prioritize quality user growth and monetization improvement. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Bilibili (BILI US) – Prioritizing profitability and quality user growth

Equity Analyst, LightStream Research

Shifara Samsudeen, FCMA, 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.

<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

<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>
<a href="https://www.smartkarma.com/entities/beijing-kuaishou-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:29725:1" rel="noopener">Kuaishou Technology (1024 HK)</a> reported 4Q2022 results yesterday. Revenue increased 15.8% YoY to RMB28.3bn (vs consensus RMB27.3bn) while reported operating losses narrowed to RMB1.24bn (vs consensus RMB1.7bn).</li>
<li>We forecasted Kuaishou’s revenue to increase by about 11.2% in 4Q2022, however, strong performance of Livestreaming and Online ad helped achieve better-than-expected results.</li>
<li>Domestic Business' OPM improved further with expanding overseas revenues and we expect Kuaishou’s profitability to continue to improve.</li>
</ul>



Kuaishou Technology (1024 HK) reported 4Q2022 results yesterday. Revenue increased 15.8% YoY to RMB28.3bn (vs consensus RMB27.3bn) while reported operating losses narrowed to RMB1.24bn (vs consensus RMB1.7bn).
We forecasted Kuaishou’s revenue to increase by about 11.2% in 4Q2022, however, strong performance of Livestreaming and Online ad helped achieve better-than-expected results.
Domestic Business' OPM improved further with expanding overseas revenues and we expect Kuaishou’s profitability to continue to improve.


Kuaishou: Strong Earnings Beat with Further Upside

<ul>
<li>BILI's 4Q22 top line was basically in line, while non-GAAP net loss beat cons. by 8.28%. We largely dial down 2023 revenue forecast. </li>
<li>Moreover, we also suggest that recent meeting by the National Radio and Television Administration (NRTA) to curb short video addiction for minor protection would heavily impact BILI.</li>
<li>Maintain SELL and cut TP to US$ 15.4, which implies 1.85X PS in 2023.</li>
</ul>


BILI's 4Q22 top line was basically in line, while non-GAAP net loss beat cons. by 8.28%. We largely dial down 2023 revenue forecast. 
Moreover, we also suggest that recent meeting by the National Radio and Television Administration (NRTA) to curb short video addiction for minor protection would heavily impact BILI.
Maintain SELL and cut TP to US$ 15.4, which implies 1.85X PS in 2023.


[Bilibili Inc. (BILI US) Target Price Change]: Minor Protection Would Be a Pending Issue

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 (BILI US) – Prioritizing profitability and quality user growth

BiliBili reported 1Q23 results on 1 Jun. Total revenue was flat YoY at RMB5.1bn in 1Q23, in line with CMBI/consensus estimate.

CMB International

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, FCMA, CGMA

[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

Kuaishou: Strong Earnings Beat with Further Upside

Kuaishou's 4Q2022 earnings beat consensus estimates. Operating losses further reduced and domestic biz's OPM improved further. Kuaishou has...

Shifara Samsudeen, FCMA, CGMA

[Bilibili Inc. (BILI US) Target Price Change]: Minor Protection Would Be a Pending Issue

BILI's 4Q22 top line was basically in line with our est., while non-GAAP net loss was in line with our est., and beat cons. by 8.28%. We largely...

Blue Lotus Research Institute

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