2023-03-27 14:18:23 ET
J.P. Morgan has put Bilibili ( NASDAQ: BILI ) on its positive catalyst watch as a quiet Q1 for game debuts heads into a heavier launch cycle.
The company launched zero games in the first quarter, but it's likely to put out nine games in the second quarter, which should drive a "positive share price reaction," analyst Daniel Chen suggests.
China recently issued its list of dozes of game approvals, now a regular occurrence after a lengthy pause on such approvals, and Bilibili ( BILI ) received a license OK for highly anticipated simulation game Pretty Derby, Chen noted.
That's one of three games set for China along with six overseas coming in the next few months. Pretty Derby, based on Japanese anime, has topped mobile gross charts in Japan, and Chen estimates 1.5B yuan (about $218M) in annual revenue for the game in China, where the intellectual property has a rich fan base.
Other key games should deliver 2B yuan in annualized gross receipts, including anime-themed 3D air combat game Thrud (the first in-house mobile game Bilibili is launching in China) and licensed anime-themed role-playing game Millennium Tour, which has 1M preregistered users.
"We expect revenue from these games, together with higher revenue from joint publishing games, to drive 30%-plus growth in BILI’s online game revenue in 2023, beating Bloomberg consensus of 11%," Chen said. "This implies ~5%/10% upside to BILI’s 2023E revenue/bottom line."
Bilibili stock ( BILI ) is up 0.6% in a mixed market day for Internet content stocks.
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Hotter game launches from Bilibili lead J.P. Morgan to expect share price bump