研究报告全文：MN3Mar2023CMBInternationalGlobalMarketsEquityResearchCompanyUpdateBilibiliBILIUSEvolvingtoaself-sustainedbusinessmodelTargetPriceUS3000BiliBiliannounced4Q22financialresultson2MarTotalrevenueincreasedbyPreviousTPUS29506YoYtoRMB61bnin4Q22inlinewithourandconsensusestimateFull-UpDownside525yearrevenuegrewby13YoYtoRMB219bnin2022AdjustednetlossCurrentPriceUS1967narrowedby21YoYtoRMB13bnin4Q22betterthanourconsensusestimateofRMB1614bnattributabletoBilisimprovingoperatingefficiencyChinaInternetFull-yearadjustednetlosswidenedfromRMB55bninFY21toRMB67bninSaiyiHECFAFY22primarilyduetosoftperformanceofhigh-marginmobilegamead85239161739businessesaswellasinvestmentingamingdevelopmentcapabilityLookinghesaiyicmbicomhkaheadinFY23Ethecompanyguidedtotalrevenuetoincreaseby10-19YoYtoRMB24-26bnwithadandVASrevenuelikelytooutpacetotalrevenueWentaoLUluwentaocmbicomhkgrowthQualityusergrowthmonetizationimprovementandcostoptimizationremainaskeyfocusforBiliinFY23WenarrowedFY2324EadjustednetlossYeTAOforecasttoRMB3712bnpreviousRMB4218bnWeliftedSOTP-basedTPfranktaocmbicomhkby2toUS300BUYSophieHUANGInlinesegmentrevenuegrowthin4Q22VASrevenuegrewby24YoYsophiehuangcmbicomhktoRMB24bnin4Q2238oftotalrevenuemainlydrivenbythestronggrowthoflivestreamingrevenueLivestreamingrevenueincreasedbyoverEasonXU30YoYinFY22withthenoofmonthlyactivelivestreaminghostsandeasonxucmbicomhkMPUsupbyover70and40YoYin4Q22Adrevenuedroppedby5StockDataYoYtoRMB15bnin4Q2225oftotalrevenueduetothemacroMktCapUSmn77409headwindandCOVID-19impactThatsaidperformance-basedadrevenueAvg3mthstoUSmn240stilldeliveredover50YoYgrowthin4Q22supportedbyitsenhancedad52wHighLowUS3219892monetizationinfrastructureMobilegamesrevenuedeclinedby12YoYtoTotalIssuedSharesmn3935SourceFactSetRMB11bnin4Q2219oftotalrevenueSelf-developedgamesaccountedfor5ofgamesrevenueinFY22andmanagementexpecttheShareholdingStructurecontributiontofurtherriseinFY23Edrivenbytwoself-developedgamestoRuiChen126Tencent112belaunchedin2Q23For1Q23EweexpecttotalrevenuetobeflattishYoYSourceCompanydatadrivenbysolidgrowthofadrevenuebutoffsetbysoftgamingbusinessSharePerformanceQualityusergrowthonhealthydevelopmentofcontentecosystemAbsoluteRelativeBilisaverageMAUsgrewby20YoYto326mnin4Q22withDAUMAU1-mth-251-227ratioupby2pctYoYto285in4Q22Averagedailytimespentperuser3-mth156158wasalsoup17YoYto96minutesthankstoitsdevelopingPUGVcontent6-mth-207-184ecosystemandexpandingvideoconsumptionscenarioegStoryModeSourceFactSetTotalvideoviewsofPUGVandStoryModegrewbyover50and17012-mthPricePerformanceYoYin4Q22In2023EBiliwillcontinuetofocusonqualitygrowthofitsuserbaseimprovingDAUMAUratioandmonetizationExpectcostoptimizationtocontinueinFY23EGrossmarginexpandedby1pctYoYand2pctQoQto203in4Q22andthecompanyexpectGPMtofurtherrisetomid-20inFY23drivenbyleverageoncontentbandwidthcostsandoptimizationofrevenuesharingcostsBiliwillalsocontinuetoexerciseprudentcontrolinitsopexespeciallyinSMexpensesSourceFactSetOverallweforecastadjustednetlossmargintonarrowfrom31inFY22to155inFY2324EEarningsSummaryYE31DecFY21AFY22AFY23EFY24EFY25ERevenueRMBmn1938421899248072772730389YoYgrowth61513013311896Grossmargin209176241293324AdjustednetprofitRMBmn54781669173669812426252EPSAdjustedRMBcents1442441700409325131574640ConsensusEPSRMBcents1442441700401026933449834210PSx2724211918SourceCompanydataBloombergCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE1MOREREPORTSFROMBLOOMBERGRESPCMBRGOORhttpwwwcmbicomhk3Mar2023BusinessforecastsupdateandvaluationFigure1BiliforecastrevisionCurrentPreviousChangeRMBmnFY23EFY24EFY25EFY23EFY24EFY25EFY23EFY24EFY25ERevenue2480727727303892648230752--63-98-GrossProfit59878123983858268393-28-32-OperatingProfit4928255298655623139-nana-Adjustednetprofit367012432541631833-nana-AdjustedEPSRMB93320110647-nana-GrossMargin241293324220273-21ppt20ppt-OperatingMargin-199-92-32-210-102-11ppt10ppt-Adjustednetmargin-148-4501-157-60-09ppt15ppt-SourceCMBIGMestimatesFigure2CMBIGMestimatesvsconsensusCMBIGMConsensusDiffRMBmnFY23EFY24EFY25EFY23EFY24EFY25EFY23EFY24EFY25ERevenue2480727727303892653131875--65-130-GrossProfit59878123983861998901--34-87-OperatingProfit4928255298645061891-nana-Adjustednetprofit367012432540971311-nana-AdjustedEPSRMB93320110334-nana-GrossMargin241293324234279-08ppt14ppt-OperatingMargin-199-92-32-170-59--29ppt-33ppt-Adjustednetmargin-148-4501-154-41-07ppt-04ppt-SourceBloombergCMBIGMestimatesFigure3BiliquarterlyfinancialRMBmn2Q213Q214Q211Q222Q223Q224Q22ConsDiffCMBIDiffMobilegames12331392129513581046147111461175-25YoY-1291147160-15257-115VAS1635190918952052210322102350227533YoY981949519371287158240Advertising10491172158810411158135515121595-52YoY201011021198456104156-47E-commerceandothers57873410036036017581134110428YoY19527753541624032131Totalrevenue44955207578150544909579461426116046149-01YoY7176145052969211363AverageMAUs237267272294306333326YoY345259165120805234Grossprofitmargin220196190160150182203SMratio311314305248239212206RDratio150151138200231195243Adjustednetmargin-294-310-286-327-400-304-214Adjustednetprofit132316131652165319641763131214331551SourceCompanydataCMBIGMestimatesPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE23Mar2023SOTPValuationBasedontheSOTPvaluationourtargetpriceforBiliisUS300perADSwhichimplies3329x2023E2024EPSOurtargetpriceofUS300includes1US115fortheadvertisingbusiness384ofthetotalvaluationbasedona20x2023EPEThetargetPEmultipleisatapremiumtotheaveragePEofthematureadvertisingplatforms13x2023EPEtoreflectBilisuniquevaluepropositioninvideoadvertisingmarketanditsstronggrowthoutlookFY22-24ErevenueCAGR222US105fortheVASbusiness349ofthetotalvaluationbasedona27x2023EPSThetargetPSmultipleisonparwiththeaveragePSofothervideoplatforms3US76formobilegames253ofthetotalvaluationbasedonan18x2023EPEThetargetPEmultiplehasadiscountovertheindustryaverage20x2023EPEasBilihasyettoestablishsuccessfultrackrecordinin-housegamesdevelopment4US04fore-commerce14ofthetotalvaluationbasedona05x2023EPSThetargetPSmultipleisonparwiththeaveragePSoftheothere-commerceplatformsFigure4BiliSOTPValuationRMBmn2023EMAURevenueper2023ENetmarginTargetPSTargetPETargetAsoftotalMAUrevenuexxvaluationvaluationVASLivestreamingMembership3664288105442728468349-Livestreaming55012236722-Membership36641043822Advertising36641716279252031397384Mobilegames36615695747201820689253E-commerce1831221223705111814TotalvaluationRMBmn81672NumberofADSmn396ValuationperADSUS300NoteLivestreamingmobilegamese-commerceMAUisbasedon15105penetrationoftotalMAUsSourceCompanydataCMBIGMestimatesFigure5PeercomparisononlinegamesandadvertisingsectorPriceEPSgrowthYoYPExCompaniesTickerLocalFY22EFY23EFY24EFY22EFY23EFY24EOnlinegamesNetEaseNTESUS815291014161816ActivisionBlizzardATVIUS75720257252019ElectronicArtsEAUS110427136161817TakeTwoInteractiveTTWOUS1087182741223021IGG799HK30143126142NANA19iDreamSky1119HK3772300130NA2310Nexon3659JP2955015116232320Nintendo7974JP510604610141516BandaiNamco7832JP8301061281231818PerfectWorld002624CH14586161618151337Interactive002555CH23091612171513AveragePE192017OnlineadvertisingWeiboWBUS19132810998BaiduBIDUUS143742213181513MetaMetaUS173427717161513AveragePE141311SourceBloombergCMBIGMNotedataasatthe1MarmarketclosePLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE33Mar2023Figure6Peercomparisononlinevideoandfirst-partye-commercePriceRevenuegrowthYoYPSxCompaniesTickerLocalFY22EFY23EFY24EFY22EFY23EFY24EOnlinevideoiQiyiIQUS691158584151413MangoExcellentMedia300413CH348199161129464035AveragePS312724First-partye-commerceJDJDUS45702146135050404VipshopVIPSUS1521885057060605AveragePS050505SourceBloombergCMBIGMNotedataasatthe1MarmarketclosePLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE43Mar2023FinancialSummaryINCOMESTATEMENT2020A2021A2022A2023E2024E2025EYE31DecRMBmnRevenue119991938421899248072772730389Costofgoodssold91591534118050188201960320550Grossprofit284040433849598781239838Operatingexpenses59811047212207109151067510824Sellingexpense349257954921434141594254Adminexpense97618382521235723572376RDexpense151328404765421741594194Operatingprofit31416429835849282552986Investmentgainloss28194532606163Othergainslosses13751457000EBIT297566287434498826121049Interestincome8370281277392424Interestexpense109155251168356416Pre-taxprofit300167137404487925761041Incometax53951046936156Aftertaxprofit30546809750849482612885Minorityinterest472011995218Others400000Netprofit30126789749748492560867Adjustednetprofit2560547866923670124325BALANCESHEET2020A2021A2022A2023E2024E2025EYE31DecRMBmnCurrentassets157403644724453346383742638550Cashequivalents4678752310173162141780817827Accountreceivables121813821329268530013289Prepayment176648483560620569357601STbankdeposits472076324768491150585210Othercurrentassets3357150614623462346234623Non-currentassets81261560617378171241739417568PPE76213501227142815921733InvestmentinJVsassos223355035651571556545591Intangibles235738364327443944754426Goodwill129623382725272527252725Othernon-currentassets147825803448281729483093Totalassets238665205341831517625482056119Currentliabilities73921207117093216572284324020Short-termborrowings10012326621662166216621Accountpayables307443614292644567147038Taxpayable10012326621662166216621Othercurrentliabilities2880261320841401880389Accruedexpenses123826331643337037674128Non-currentliabilities8692182669498185102159521673Long-termborrowings8341177848683177842078420784Othernon-currentliabilities351482814726811889Totalliabilities160833033726591401664443845693Sharecapital000000Capitalsurplus146163593035930359303593035930Retainedearnings71751397120437241802544625420Otherreserves159255255255255255Totalshareholdersequity76002170415238114951022910255Minorityinterest182122101153171Totalequityandliabilities238665205341831517625482056119PLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE53Mar2023CASHFLOW2020A2021A2022A2023E2024E2025EYE31DecRMBmnOperatingProfitbeforetaxation300167137404487925761041Depreciationamortization327539370462532589Taxpaid53951046936156Changeinworkingcapital14879975563140223Others188734423793383643864530Netcashfromoperations753264721614925184144InvestingCapitalexpenditure223917563233347236463828Acquisitionofsubsidiariesinvestments1757671632812400Others4911196181996487278297Netcashfrominvesting8907245781565310939244125FinancingNetborrowings5695112036356910130000Proceedsfromshareissues2817192880000Others1771030000Netcashfromfinancing8335303896356910130000NetchangeincashCashatthebeginningoftheyear496346787523101731621417808Exchangedifference46631920000Cashattheendoftheyear4678752310173162141780817827GROWTH2020A2021A2022A2023E2024E2025EYE31DecRevenue77061513013311896Grossprofit138642448555357211PROFITABILITY2020A2021A2022A2023E2024E2025EYE31DecGrossprofitmargin237209176241293324Operatingmargin2623323821999232Adjnetprofitmargin2132833061484501ReturnonequityROE41146340636323685GEARINGLIQUIDITYACTIVITIES2020A2021A2022A2023E2024E2025EYE31DecNetdebttoequityx050503070909Currentratiox213014161616Receivableturnoverdays371260221395395395Payableturnoverdays12251038868125012501250VALUATION2020A2021A2022A2023E2024E2025EYE31DecPB12410841465252SourceCompanydataCMBIGMestimatesNoteThecalculationofnetcashincludesfinancialassetsPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE63Mar2023DisclosuresDisclaimersAnalystCertificationTheresearchanalystwhoisprimaryresponsibleforthecontentofthisresearchreportinwholeorinpartcertifiesthatwithrespecttothesecuritiesorissuerthattheanalystcoveredinthisreport1alloftheviewsexpressedaccuratelyreflecthisorherpersonalviewsaboutthesubjectsecuritiesorissuerand2nopartofhisorhercompensationwasisorwillbedirectlyorindirectlyrelatedtothespecificviewsexpressedbythatanalystinthisreportBesidestheanalystconfirmsthatneithertheanalystnorhisherassociatesasdefinedinthecodeofconductissuedbyTheHongKongSecuritiesandFuturesCommission1havedealtinortradedinthestockscoveredinthisresearchreportwithin30calendardayspriortothedateofissueofthisreport2willdealinortradeinthestockscoveredinthisresearchreport3businessdaysafterthedateofissueofthisreport3serveasanofficerofanyoftheHongKonglistedcompaniescoveredinthisreportand4haveanyfinancialinterestsintheHongKonglistedcompaniescoveredinthisreportCMBIGMRatingsBUYStockwithpotentialreturnofover15overnext12monthsHOLDStockwithpotentialreturnof15to-10overnext12monthsSELLStockwithpotentiallossofover10overnext12monthsNOTRATEDStockisnotratedbyCMBIGMOUTPERFORMIndustryexpectedtooutperformtherelevantbroadmarketbenchmarkovernext12monthsMARKET-PERFORMIndustryexpectedtoperformin-linewiththerelevantbroadmarketbenchmarkovernext12monthsUNDERPERFORMIndustryexpectedtounderperformtherelevantbroadmarketbenchmarkovernext12monthsCMBInternationalGlobalMarketsLimitedAddress45FChampionTower3GardenRoadHongKongTel85239000888Fax85239000800CMBInternationalGlobalMarketsLimitedCMBIGMisawhollyownedsubsidiaryofCMBInternationalCapitalCorporationLimitedawhollyownedsubsidiaryofChinaMerchantsBankImportantDisclosuresTherearerisksinvolvedintransactinginanysecuritiesTheinformationcontainedinthisreportmaynotbesuitableforthepurposesofallinvestorsCMBIGMdoesnotprovideindividuallytailoredinvestmentadviceThisreporthasbeenpreparedwithoutregardtotheindividualinvestmentobjectivesfinancialpositionorspecialrequirementsPastperformancehasnoindicationoffutureperformanceandactualeventsmaydiffermateriallyfromthatwhichiscontainedinthereportThevalueofandreturnsfromanyinvestmentsareuncertainandarenotguaranteedandmayfluctuateasaresultoftheirdependenceontheperformanceofunderlyingassetsorothervariablemarketfactorsCMBIGMrecommendsthatinvestorsshouldindependentlyevaluateparticularinvestmentsandstrategiesandencouragesinvestorstoconsultwithaprofessionalfinancialadvisorinordertomaketheirowninvestmentdecisionsThisreportoranyinformationcontainedhereinhavebeenpreparedbytheCMBIGMsolelyforthepurposeofsupplyinginformationtotheclientsofCMBIGMoritsaffiliatestowhomitisdistributedThisreportisnotandshouldnotbeconstruedasanofferorsolicitationtobuyorsellanysecurityoranyinterestinsecuritiesorenterintoanytransactionNeitherCMBIGMnoranyofitsaffiliatesshareholdersagentsconsultantsdirectorsofficersoremployeesshallbeliableforanylossdamageorexpensewhatsoeverwhetherdirectorconsequentialincurredinrelyingontheinformationcontainedinthisreportAnyonemakinguseoftheinformationcontainedinthisreportdoessoentirelyattheirownriskTheinformationandcontentscontainedinthisreportarebasedontheanalysesandinterpretationsofinformationbelievedtobepubliclyavailableandreliableCMBIGMhasexertedeveryeffortinitscapacitytoensurebutnottoguaranteetheiraccuracycompletenesstimelinessorcorrectnessCMBIGMprovidestheinformationadvicesandforecastsonanASISbasisTheinformationandcontentsaresubjecttochangewithoutnoticeCMBIGMmayissueotherpublicationshavinginformationandorconclusionsdifferentfromthisreportThesepublicationsreflectdifferentassumptionpoint-of-viewandanalyticalmethodswhencompilingCMBIGMmaymakeinvestmentdecisionsortakeproprietarypositionsthatareinconsistentwiththerecommendationsorviewsinthisreportCMBIGMmayhaveapositionmakemarketsoractasprincipalorengageintransactionsinsecuritiesofcompaniesreferredtointhisreportforitselfandoronbehalfofitsclientsfromtimetotimeInvestorsshouldassumethatCMBIGMdoesorseekstohaveinvestmentbankingorotherbusinessrelationshipswiththecompaniesinthisreportAsaresultrecipientsshouldbeawarethatCMBIGMmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreportandCMBISwillnotassumeanyresponsibilityinrespectthereofThisreportisfortheuseofintendedrecipientsonlyandthispublicationmaynotbereproducedreprintedsoldredistributedorpublishedinwholeorinpartforanypurposewithoutpriorwrittenconsentofCMBIGMAdditionalinformationonrecommendedsecuritiesisavailableuponrequestForrecipientsofthisdocumentintheUnitedKingdomThisreporthasbeenprovidedonlytopersonsIfallingwithinArticle195oftheFinancialServicesandMarketsAct2000FinancialPromotionOrder2005asamendedfromtimetotimeTheOrderorIIarepersonsfallingwithinArticle492atodHighNetWorthCompaniesUnincorporatedAssociationsetcoftheOrderandmaynotbeprovidedtoanyotherpersonwithoutthepriorwrittenconsentofCMBIGMForrecipientsofthisdocumentintheUnitedStatesCMBIGMisnotaregisteredbroker-dealerintheUnitedStatesAsaresultCMBIGMisnotsubjecttoUSrulesregardingthepreparationofresearchreportsandtheindependenceofresearchanalystsTheresearchanalystwhoisprimaryresponsibleforthecontentofthisresearchreportisnotregisteredorqualifiedasaresearchanalystwiththeFinancialIndustryRegulatoryAuthorityFINRATheanalystisnotsubjecttoapplicablerestrictionsunderFINRARulesintendedtoensurethattheanalystisnotaffectedbypotentialconflictsofinterestthatcouldbearuponthereliabilityoftheresearchreportThisreportisintendedfordistributionintheUnitedStatessolelytomajorUSinstitutionalinvestorsasdefinedinRule15a-6undertheUSSecuritiesExchangeActof1934asamendedandmaynotbefurnishedtoanyotherpersonintheUnitedStatesEachmajorUSinstitutionalinvestorthatreceivesacopyofthisreportbyitsacceptancehereofrepresentsandagreesthatitshallnotdistributeorprovidethisreporttoanyotherpersonAnyUSrecipientofthisreportwishingtoeffectanytransactiontobuyorsellsecuritiesbasedontheinformationprovidedinthisreportshoulddosoonlythroughaUS-registeredbroker-dealerForrecipientsofthisdocumentinSingaporeThisreportisdistributedinSingaporebyCMBISingaporePteLimitedCMBISGCompanyRegnNo201731928DanExemptFinancialAdviserasdefinedintheFinancialAdvisersActCap110ofSingaporeandregulatedbytheMonetaryAuthorityofSingaporeCMBISGmaydistributereportsproducedbyitsrespectiveforeignentitiesaffiliatesorotherforeignresearchhousespursuanttoanarrangementunderRegulation32CoftheFinancialAdvisersRegulationsWherethereportisdistributedinSingaporetoapersonwhoisnotanAccreditedInvestorExpertInvestororanInstitutionalInvestorasdefinedintheSecuritiesandFuturesActCap289ofSingaporeCMBISGacceptslegalresponsibilityforthecontentsofthereporttosuchpersonsonlytotheextentrequiredbylawSingaporerecipientsshouldcontactCMBISGat6563504400formattersarisingfromorinconnectionwiththereportPLEASEREADTHEANALYSTCERTIFICATIONANDIMPORTANTDISCLOSURESONLASTPAGE7