By Ronnie Harui
Shares of Bilibili, the Chinese video-sharing platform, took a significant hit in response to the company's disappointing third-quarter financial report. The net loss for the July-September period came in at 1.35 billion yuan ($189.3 million), surpassing the median estimate of a 1.01 billion yuan net loss projected by analysts.
As a result of this news, Bilibili's Hong Kong-listed shares dropped by 12.0% to 88.90 Hong Kong dollars ($11.39) during Asian morning trade on Thursday, reaching their lowest level since November 2022. In the U.S., the company's American Depositary Receipts (ADRs) also experienced an 11.1% decline, falling to $11.86 following the release of the third-quarter results.
Despite this setback, Bilibili did see an increase in total net revenue for the third quarter, rising from 5.79 billion yuan to 5.81 billion yuan compared to the same period last year. However, the company expects its total net revenue for the full year of 2023 to be at the lower end of the projected range of 22.5 billion yuan to 23.5 billion yuan due to lower-than-expected mobile game revenue.
Analyst Jialong Shi from Nomura expressed concerns about Bilibili's management and their ability to navigate challenging market conditions. In a research report, Shi stated that the company appeared unprepared for difficult times and had been caught off-guard by the deteriorating macro and industry environment. As a result, Nomura downgraded Bilibili's ADRs to neutral from buy and adjusted its target price from $18.00 to $13.00.
