Bilibili To Double Total Addressable Market To $200B With New Product Launches: Analyst

Mizuho Securities analyst Wei Fang initiated coverage on Bilibili Inc BILI with a Buy rating and a price target of $18.

The analyst expects BILI to successfully transition its products to more than double the total addressable market to $200 billion, driving top-line growth to double digits and attaining profitability in FY24. 

The transitions comprise improving ad monetization through DR (direct response) and expanding into live streaming. 

Notably, the analyst mentions that BILI nearly doubled its TAM to $140 billion from $75 billion in the last few years by expanding to mass-market entertainment from niche ACG (anime, comics, and games) space and DR advertising from brand advertising. 

Fang expects revenue growth to accelerate to double digits starting FY24 (3-yr CAGR of 16%) from mid-single-digits in FY23, aided by DR advertising and live streaming. 

The analyst anticipates BILI accelerating monetization by expanding its user base, boosting engagement, and adding inventory.

Fang projects BILI to achieve break-even operating income in FY24, improving nearly 15 basis points Y/Y, and the operating margin forecast is 7 percentage points ahead of consensus.

The analyst estimates revenue of CNY22.655 billion in FY23, CNY26.865 billion in FY24, and CNY30.842 billion in FY25.

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Price Action: BILI shares are trading lower by 1.33% at $14.50 on the last check Monday.