CLSA has released a research report reaffirming its "Outperform" rating on BILIBILI-W (09626), while trimming its adjusted net profit forecasts for 2026 and 2027 by 5% and 8%, respectively. The brokerage has also lowered its US-listed Bilibili Inc. (BILI.US) target price from $29.1 to $22.5.

CLSA noted that BILIBILI-W's second-quarter results came in line with expectations, with total revenue up 8.2% year-over-year and adjusted EBIT growing approximately 21%. Advertising revenue maintained robust growth, surging 28% year-over-year, while the mobile games segment continued its weak performance, declining 14% year-over-year. Additionally, management has maintained its artificial intelligence-related capital expenditure guidance of RMB 1 billion for this year.

Looking ahead, CLSA expects BILIBILI-W to continue similar trends in the third quarter, with advertising revenue projected to grow 24% year-over-year, while mobile games are anticipated to decline 6% year-over-year. For the fourth quarter, the firm expects mobile game revenue to return to positive growth with the launch of two new titles, although advertising will face a higher comparison base. The brokerage projects total revenue growth of approximately 9% and 10% for the third and fourth quarters, respectively.

The firm pointed out that while strict sales and marketing expense controls will continue to drive profit growth, AI investment remains a risk factor.