Open Source Securities: First initiated a "buy" rating on BILIBILI-W(09626), accelerating commercialization and fully unleashing value.

Guotai Junan Securities released a research report stating that it has initiated coverage on BILIBILI-W (09626) for the first time, giving it a "buy" rating. It predicts that the net profit attributable to the mother from 2024 to 2026 will be -13.79/0.29/7.43 billion yuan respectively, corresponding to EPS of -3.3/0.1/1.8 yuan based on the current share capital. Bilibili started as an ACG vertical video website and has built a Z+ generation paradise, gradually breaking through the dimensional wall to transform into a diversified cultural community. The company is optimistic about continuously attracting users with high-quality content, retaining users with a community atmosphere, and comprehensively monetizing through games, value-added services (memberships), advertising, and IP. With the growth in age and income of the core Z+ generation users, and the rise of spiritual consumption values, it has great potential for monetization, and commercialization or acceleration can be expected. The report states that users aged 25-35 may still be the core user group of Bilibili in the future. Meanwhile, with diversified content expansion, the platform is expected to continue attracting more older and younger users, and multi-terminal and multi-scenario expansion will help increase platform penetration. The rapid development of Story Mode can lead the platform from short videos to full-time coverage, and continue to seize user time and open up traffic monetization space. The company has a solid foundation in the Z+ generation, and with the growth in age and purchasing power of core users, 3-5 years later may enter a "golden period" for commercialization and monetization. In terms of games, the company's release of "Three Kingdoms: Strategy to Conquer the World" has performed well, maintaining a top 5 position on the iOS bestseller list since its launch on June 13. It is expected to contribute significantly to performance growth, and new category expansions may further open up growth space. As for advertising, with the integration of platform resources and continuous improvement of infrastructure, integrated marketing may bring value enhancement for single user advertising, driving continuous growth in the advertising business. For value-added services (memberships), with the continuous enrichment of OGV content and the broadening of live content, the payment rate and ARPU value may further increase, and IP monetization may continue to expand incremental space.