We forecast Bilibili’s 3Q26 revenue at RMB8.17bn (previously RMB8.22bn), up 6.3% YoY, and adjusted attributable net profit at RMB730mn (previously RMB720mn), down 7.6% YoY. For the full year, we forecast adjusted attributable net profit of RMB3.00bn (previously RMB3.06bn), up 16% YoY. Our revenue revision mainly reflects pressure on consumer-facing advertisers’ budgets, which has slowed advertising growth from the previous quarter. Expense optimization could offset revenue pressure, leaving our 3Q26 earnings estimate broadly unchanged. However, uncertainty over 4Q26 advertising demand and upfront spending on Sanguozhi: Wangdao Tianxia could weigh modestly on 4Q26 earnings. We therefore trim our full-year earnings forecast. Looking into next year, we expect steady growth in the high-gross-margin advertising business and incremental gross billings from new games. Areas to watch are the sustainability of Lumi Master’s gross billings and the timing of Sanguozhi: Wangdao Tianxia’s year-end launch. Maintain BUY. Bilibili is on our Huatai Conviction BUY list.
Advertising pressured with likely slower growth in 2H26
We forecast 3Q26 advertising revenue of RMB3.07bn (previously RMB3.14bn), up 20% YoY. The slowdown mainly reflects tighter marketing budgets and more cautious spending by consumer-facing advertisers. We also expect subdued spending by e-commerce advertisers during major 4Q26 shopping promotions. We therefore lower our 4Q26 advertising growth forecast to 15% YoY and our full-year forecast from 23.8% to 22%. Traffic growth remains steady and advertising capabilities continue to improve, leaving the market-share gain thesis intact. Bilibili recently introduced pause ads to generate incremental advertising revenue. Looking into next year, we expect high-gross-margin performance advertising to outgrow the overall advertising business and provide a more meaningful boost to gross margin.
Earnings forecast and valuation
To reflect pressure on advertising demand in 2H26, we trim our 2026-2028 revenue forecasts to RMB32.52/35.48/38.41bn (previously RMB32.63/35.77/38.74bn, revisions of -0.34%/-0.82%/-0.87%) and adjusted attributable net profit forecasts to RMB3.00/3.62/4.15bn (previously RMB3.06/3.72/4.34bn, revisions of -1.76%/ -2.60%/-4.37%). We retain our PE-based valuation, benchmarking Bilibili against leading Chinese and international internet companies with comparable content formats and monetization models. Peers trade at 16.7x 2026E PE (previously 16.3x). With Bilibili’s margins still expanding and its three-year earnings CAGR of 17% exceeding peers’ 15.7%, we maintain our target multiple of 20x 2026E PE. This implies target prices of USD21.0 per US-listed ADS and HKD164.8 per HK-listed share (previously USD21.19 and HKD166.12). Maintain BUY. Bilibili is on our Huatai Conviction BUY list.
Risks: weaker-than-expected user growth, weaker-than-expected game performance, tighter regulation of the company’s businesses.