Jefferies lists out key points after Bilibili's investor day

High-Quality Youth Content: Bilibili focuses on creating high-quality, mid- to long-form video content for its predominantly young audience, which enhances user retention rates significantly.

AI in Content Discovery: The platform leverages artificial intelligence to improve content visibility, identify quality interactions, and optimize content verification processes, contributing to overall efficiency.

Adaptation in Online Gaming: Bilibili is refining its online gaming strategy to better engage mainstream users by understanding their habits and promoting sustained interest in gaming offerings.

Advertising Market Growth: The company is expanding its advertising market share through innovative AI-driven initiatives, leading to enhanced advertising effectiveness and a favorable investment outlook with a projected price target of $29.

Recommendation Rating: Strong Buy

Jefferies released a report on Friday regarding the Chinese video-sharing platform Bilibili (NASDAQ:BILI) in the wake of the company's investor day for 2025. The analysis highlights several important insights into the company’s strategy and performance.

Key Insights

Focus on High-Quality Content for Youth: Analysts, led by Thomas Chong, indicated that Bilibili is dedicated to providing high-quality content tailored for its young and educated audience. The platform excels in mid- to long-form video, which effectively caters to various popular categories.

Chong pointed out that Bilibili attracts young users who share common interests, particularly in anime, gaming, music, knowledge, and technology. The user demographic is predominantly young, with an average age of 26 years (and 23 for new users). Notably, the retention rates for users who have been registered for over 10 to 15 years are remarkably high, at 84% and 90%, respectively.

AI Enhancing Content Discovery: The Jefferies report indicates that artificial intelligence (AI) plays a pivotal role in improving content visibility on Bilibili's platform. The AI technology accurately identifies quality comments and uncovers engaging videos. Furthermore, it enhances cost-efficiency in content verification processes, achieving notable precision.

Online Gaming Strategy: Bilibili is adapting its online gaming offerings to align with the preferences of mainstream users. The company emphasizes long-term engagement by analyzing user insights and the overall influence of its platform. This strategy involves understanding user habits and the factors that promote sustained interest.

Gaining Advertising Market Share: Bilibili continues to capture market share in the advertising sector, driven by multiple AI initiatives. These initiatives include advanced recommendation algorithms and innovative creative solutions that enhance advertising effectiveness.

The report elaborates that Bilibili employs a dual strategy—leveraging a "large-scale and multiple" approach via GPU architecture and a Mixture of Experts model. Additionally, AI bolsters the understanding of multimodal content, enhancing user experience.

Investment Outlook: Jefferies has assigned Bilibili a "buy" rating with a price target of $29, suggesting an anticipated upside potential of 33%. As of now, Bilibili’s shares have experienced an 18% increase year-to-date, reflecting positive momentum in the market.