Bilibili’s 4Q20 results all round beat, with rev +91% YoY, 5% above consensus. 1Q21E rev guidance beat 3%. Mgmt guided up its MAU target to 400mn in FY23E, strengthening its visibility for all-age user group expansion and rising TAM. We turn more bullish on its user trend and monetization enhancement. We expect ads to continuously accelerate in 1Q21E, coupled with eye-catching MAU growth. We lifted its rev by 15%/25% in FY21/22E, with higher DCF-based TP of US$173.
- Another strong quarter. 4Q20 revenue was RMB3.8bn, up 91% YoY, 5%/6% above consensus/ our estimates. Non-GAAP net loss came in at RMB666mn (vs. consensus of RMB714mn). 1Q21E rev guidance came in at RMB3.7-3.8bn, up 60-64% YoY, with midpoint 3% above consensus.
- Guiding up MAU target at 400mn in FY23E. We are impressed by Bili’s 4Q20 MAU sequential growth (202mn, +2% QoQ) even in ecommerce strong seasonality, driven by hot content (e.g. HOB <天官赐福>) and multi-channel promotion. Mgmt raised its MAU target to 400mn in FY23E (vs. consensus at 350mn), with brand perception to 90% in FY21E (vs. 60% in FY20). Bili saw ramp-up of 80’s users, and 86% of its MAU aged below 35, strengthening its visibility on all-age user group expansion.
- Monetization enhancement to continue. We reiterated our confidence on its monetization potential, coupled with OGV content expansion and vibrant pipeline. Game rev grew 30% YoY in 4Q20, with strong Genshin Impact <原神>. We believe 2021 new games will bring further upside, including highly-anticipated Sword Art Online, Artery Gear: Fusion, etc. Ads accelerated to 149% YoY in 4Q20, thanks to strong ads demand from game, food& beverage, ecommerce, beauty and 3C verticals. We turn more bullish on its ads potential, backed by increasing brand perception, better targeting and higher adaption of Huahuo platform <花火>. Mgmt guided stable ad loads in 2021 (~5%), while prioritizing on middle platform strategy, scenario enrichment, and integrated marketing efficiencies across verticals. We expect its ads to grow 162%/115% YoY in 1Q21E/FY21E, as the fastest-growing segment. Livestreaming & VAS momentum would continue, up 91% YoY in 1Q21E, in our estimates.
- Maintain BUY. To reflect better topline outlook, we lifted its rev by 15%/25% in FY21/22E, with higher TP of US$173 (14.7x FY22E P/S, vs prior 8x FY21E P/S) from US$62. Considering higher MAU target, we see high visibility for Bili to expand its TAM with monetization diversification in the long run.
