Kaiyuan Securities: Maintains Bilibili-W "Buy" Rating; Optimistic on Rich New Games/AI-Enabled Platform Co-Driving Growth

Open Source Securities released a research report stating that considering Bilibili-W (09626)'s plan to increase AI investment, the firm has lowered its net profit forecasts attributable to shareholders for 2026-2027 and added a forecast for 2028 to 15.74/24.86/33.07 billion yuan (previously 20.86/28.50 billion yuan). The current stock price corresponds to a PE ratio of 46.7/29.5/22.2 times. We are optimistic about AI’s long-term empowerment and maintain a “Buy” rating.

Open Source Securities’ main views are as follows:

Q4 performance continues high growth, advertising growth accelerates, and commercialization is expected to speed up

The company achieved revenue of 8.321 billion yuan in Q4 2025 (up 8% YoY, up 8% QoQ), net profit attributable to shareholders of 513 million yuan (up 471% YoY, up 9% QoQ), and adjusted net profit of 878 million yuan (up 94% YoY, up 12% QoQ). Value-added services revenue in Q4 was 3.262 billion yuan (up 6% YoY, up 8% QoQ), mainly due to increased revenue from charging and other value-added services and VIP memberships; advertising revenue was 3.042 billion yuan (up 27% YoY, up 18% QoQ), driven by improved ad product supply and efficiency; mobile game revenue was 1.54 billion yuan (down 14% YoY, up 2% QoQ), mainly due to the launch of “Three Kingdoms: Strategize the World,” which raised the base for 2024; IP derivative products and other income totaled 477 million yuan (up 3% YoY). Gross margin has increased for 14 consecutive quarters, reaching 37.0% in Q4 (up 0.9 percentage points YoY, up 0.4 percentage points QoQ); combined sales, management, and R&D expense ratios were 31.0%, demonstrating operating leverage.

Long-term operation builds evergreen games, rich game pipeline provides strong growth momentum

The company adheres to long-term operation. Its core game, “Three Kingdoms: Strategize the World,” launched a new season with a new script, boosting its ranking to 4th on the mainland iOS game bestseller list; actively expanding overseas, “Three Kingdoms: Strategize the World” was launched in Hong Kong, Macau, and Taiwan markets in January, with plans to gradually expand to Japan, Korea, and other Asian markets. The pipeline is rich, with popular PC single-player game “Escape from Duckov” in development for console and mobile versions; the high DAU potential game “Three Kingdoms: Hundred Generals” has completed two testing rounds, with paid testing planned for March and a mid-2026 launch; casual pet-catching game “Shine! Lummi” has received approval, with paid testing planned for Q2 2026 and global release within 2026.

Community ecosystem continues healthy development, optimistic about AI-driven platform commercialization space

The company competes with high-quality differentiated content, with daily active users (DAU) accelerating YoY (Q4 DAU of 113 million, +10% YoY), monthly active users (MAU) in Q4 of 366 million (+8% YoY), and average daily usage time in Q4 reaching 107 minutes (+8 minutes YoY). Total video watch time over 5 minutes increased by over 20% YoY, and total user engagement time in 2025 increased by 14% YoY. The creator ecosystem is healthy, with average monthly video submissions in 2025 increasing by 15% YoY, and UP owner income increasing by 21% YoY. AI accelerates platform growth; AIGC tools lower barriers for creators and advertisers, LLM improves content distribution and ad targeting accuracy, and AI-related ad spending grew over 150% YoY in 2025. We believe AI will reshape content creation, experience, and monetization methods, further opening up platform commercialization potential.

Risk warning: game lifecycle or revenue may underperform expectations, advertising revenue growth may fall short of expectations, etc.