Bilibili Stock Analysis

Invesdea 💰 Investing Ideas
3 min readJul 7, 2022

Can Bilibili ever become profitable?

Overview 📖

Bilibili products:

  • Video sharing and streaming applications like YouTube
  • mobile games.
from bilibili.com

Bilibili revenue composition:

  • Mobile Games 27%
  • Membership and Services 41%
  • Advertising 21%
  • E-commerce 12%.

Bilibili industries

  • Streaming Service
  • Gaming
  • Advertising
  • E-commerce

Advantages 🏰

  • Bilibili has built a loyal and active user community and does not have a similar competitor in China.
  • The average age of Bilibili users is 23.5 years old, and 86% of our users are below 35 years old. More than half of our users are from the first and second-tier cities, all of which metric represents the main cohort that’s driving all kinds of consumption in China.

Growth 🌱

  • Revenue Q/Q (3.9B -> 5.05B) +30%
  • Revenue TTM (14.32B -> 20.54B) +43%
  • Paying user members Q/Q +60%.
  • Ad revenue by 46% year-on-year in Q1.
  • Total MAUs grew by 31% year over year
  • DAUs grew by 32% year over year.
  • DAU Daily time spent grew 52% year-over-year
from Bilibili.com

Profitability 💰

  • Gross Margin 16%
  • Operating Margin -39%
  • Net Margin -45%
  • Gross Profit Q/Q (164.67M -> 121.09M) -26%
  • Gross Profit TTM(886.65M -> 615.1M) -31%
  • Operating Expenses Q/Q (319.32M -> 419.71M) +31%
  • Operating Expenses / Gross Profit (419.71M / 121.09M) 347%
  • Operating Expenses / Gross Profit (1.72B / 615.1M) 280%

Valuation ⚖️

  • Market Cap 11B
  • P / S: 4
  • P / Gross Profit: 18
  • P / Operating Income: No Income
  • P / E: Not Profitable

Risks

  • China's COVID lockdown makes a lot of advertisers put their advertising plans on hold or delay their advertising dollars
  • As for Bilibili’s e-commerce business, starting from March, especially in April and May, a lot of logistics disruption due to the lockdowns or staying-at-home measures across different cities in Shanghai — in China, and that’s impacting people’s willingness to purchase as well as the delivery services. This impact will continue in the second quarter.
  • Bilibili is still far from being profitable. Even worse, its profitability is deteriorating in the latest quarter.

Catalysts

  • Story Mode’s short-form video feature (similar to TikTok) continues to grow.

Bull Cases

  • Bilibili will continue to grow because of its unique and strong community effect.
  • Bilibili could eventually become profitable as Chinese consumers are more willing to spend money on entertainment.

Bear Cases

  • Bilibili's user growth would eventually slow down.
  • Streaming service is a competitive industry. It does not seem Bilibili is able to find an effective way to be profitable.

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