Bilibili (BILI, Financial) saw its shares rise over 7.8% in pre-market trading, reaching $20.98. The surge is driven by expectations of stronger-than-anticipated third-quarter earnings, to be reported next month. Analysts from BOC International highlight the impressive performance of Bilibili's new game, "Three Kingdoms: Strategist," which is expected to significantly boost the company's revenue and profit. Current projections suggest a 28% year-over-year revenue growth, outperforming market expectations by approximately 5%.
The company’s mobile gaming revenue is predicted to grow by 99% year-over-year, while advertising revenue is set to increase by 28%. Adjusted net profit margin is expected to reach 5.5%, with an anticipated improvement in gross margin to 35.3%. BOC International maintains a "Buy" rating on Bilibili, raising the target price to HKD 178.
Similarly, CICC has revised Bilibili's third-quarter revenue forecast upwards by 1% to RMB 7.3 billion, marking a 26% increase year-over-year, thanks to better-than-expected performance of the game “Three Kingdoms.” The gross margin is expected to rise by 9 percentage points year-over-year and 4 percentage points quarter-over-quarter to 34%, attributed to the ongoing release of operational leverage and the growing contribution of gaming and advertising income. CICC raises Bilibili's target price from HKD 155 to HKD 194, while maintaining a "Buy" rating.
