CICC has released a research report maintaining its profit forecasts for Bilibili-W (09626, BILI.US) for 2026 and 2027. The current share price implies a Non-GAAP P/E ratio of 17.4x/15.4x for the Hong Kong listing and 17.3x/15.4x for the US listing based on 2026/2027 estimates. The firm reiterates its Outperform industry rating and target price of HK$194/US$25. This target corresponds to a 2026/2027 Non-GAAP P/E of 24x/22x for both listings, representing potential upside of approximately 39% for the Hong Kong shares and 40% for the US shares from current levels.

Core Investment Thesis

CICC's primary analysis highlights the unique value of Bilibili's content community within the industry chain and anticipates improvements in advertising monetization efficiency.

Content Community and Advertising

The company emphasizes that in the AI era, the value of high-quality content with broad consensus, social interaction, trust, and a sense of identity and belonging becomes more prominent. For advertising, the foundational assets for Bilibili's commercialization are its traffic, community mindset, and content-driven business flywheel. Future plans involve deepening efforts in search, video playback pages, and large-screen scenarios. Regarding AI Agents, the company aims to achieve breakthroughs in deep content understanding, AI-generated video materials, and iterative improvements in smart distribution and matching algorithms. CICC believes that in the AI era, Bilibili's position as a high-quality content community platform makes it a scarcer asset. The firm sees development potential for Bilibili's advertising monetization in terms of traffic, scenario exploration, and distribution efficiency.

Game Pipeline and Development Strategy

Bilibili's gaming strategy focuses on expanding into new categories popular with younger demographics, ensuring a stable long-term pipeline through a mix of in-house development and publishing, and launching products across multiple platforms and globally. The company plans to add at least two new long-operating, top-tier niche products. The current pipeline includes titles such as "Shine! Lumi" (iOS expected launch October 1, 2026), "Romance of the Three Kingdoms: The Way of the King" (iOS expected launch November 19, 2026), "Three Kingdoms: Hundred Generals Card" (ongoing optimization), "Three Kingdoms: Fire Phoenix" (strategy wargame), "Fierce Battle: Big Card Heroes" (battle card game), and the "Escape from Yakov" mobile game, among others. Progress on new game launches will be a key focus.

Key Investor Considerations

Investor concerns center on AI investments and their business impact, product logic, the gaming and charging businesses, and overseas expansion. On new strategic directions, the company indicated that future major investments will be in AI. Bilibili believes AI will change productivity but not relationships, with its core being "relationship operations." AI is expected to help enhance Bilibili's recommendation algorithms, while the company will continue to prioritize commercial ROI metrics in its investments. Regarding the gaming business, the company expects the number of in-house developed games to increase slowly, with an overall cautious approach to project approval favoring quality over quantity.

Potential Risks

The report notes risks including advertising and gaming business growth falling short of expectations, intensifying competition, and costs and expenses exceeding forecasts.