Bilibili shares slip in Hong Kong amid growth concerns

By Ben Otto

Bilibili's shares fell in early Asian trading Friday, as investors weighed tepid near-term growth prospects even as the company's bottom line improved in its latest quarterly results.

Bilibili's Hong Kong-traded shares were 3.3% lower at HK$120.00, bucking a rally in tech stocks in the Asian financial hub. The Hang Seng Tech Index was up 3.9%, while the city's broader benchmark index was up 2.9%.

The Shanghai-based video-sharing company on Thursday said its first-quarter net loss narrowed on year, as it focused on ongoing cost cuts. Revenue was up slightly on year and down 17% on quarter. The company's American depositary receipts (BILI) closed 1.3% higher at US$15.87.

Citi analysts in a research note said the narrowed loss "looks decent," but they added that "top-line momentum could remain weak" in the second quarter on a dearth of new title releases. They trimmed 2023-2025 revenue estimates by 3%-4% to reflect delayed launches of new gaming titles.

They also flagged what they said was an unexpected 3% on-quarter drop in monthly average users, saying it "might raise some investors' concerns."

The analysts also suggested revenue could pick up in the second half on the release of new games and a possible acceleration in ad growth alongside a gradually recovering economy. They kept a buy rating but lowered their target price on Bilibili's ADRs to US$24 from US$28.

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06-01-23 2345ET

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