BofA Securities issued a "Buy" rating for BILIBILI-W (09626.HK) based on several key factors:
1. Investor Recognition of Scarcity Value: There is an increasing recognition among investors of the platform's unique value, particularly in the context of its user-generated content model.
2. User Growth and Engagement: The platform has experienced accelerated natural growth in both user numbers and usage time, which has occurred without significant marketing expenses.
3. Valuation Premium Justification: Despite a reset in earnings per share (EPS) forecasts due to increased investments in AI, BofA believes that the valuation premium for BILIBILI-W is still justified. This is supported by the accelerated growth in its core business, limited competition, and expectations of faster-than-average EPS growth in 2026-2027 compared to peers.
4. Adjusted Profit Forecasts: Although the broker slightly lowered its adjusted net profit forecasts for 2026-2027 by 14-18% to account for higher AI investments, the overall outlook remains positive.
These factors led BofA Securities to reaffirm its "Buy" rating, albeit with a reduced target price from $242 to $234.
