Volatile stock to watch: Bilibili Inc – ADR (NASDAQ: BILI)

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Bilibili Inc – ADR (NASDAQ: BILI) stock lost over 7.2% in the pre-market session of 18th March, 2020 (Source: Google finance) after the company in the fourth quarter of FY 19 has reported on an adjusted basis, the loss per share of to RMB1.01 ($0.15), that has widened from RMB0.46 a year ago. Net revenues rose by 74% to RMB2.01 billion ($288.4 million). The firm projected a loss of RMB0.97 per share on revenue of RMB1.97 billion for the fourth quarter. The company posted the gross profit of RMB397.9 million (US$57.2 million), which represents an increase of 102% from the same period in 2018. The company has generated Loss from operations of RMB419.9 million (US$60.3 million), compared to RMB288.8 million in the same period of 2018. At the end of December, 2019, the Company had cash and cash equivalents, time deposits, as well as short-term investments of RMB8.1 billion (US$1,158.9 million), compared to RMB5.2 billion as of December 31, 2018.

Moreover, for the fourth quarter, revenue from mobile games rose by 22% due to the increasing popularity of both existing and newly launched mobile games. Revenues from live broadcasting and VAS grew by whopping 183%, mainly due to its increased monetization efforts, on the back of increases in the number of paying users for live broadcasting services and its premium membership program and other VAS. At the end of the fourth quarter, the number of monthly active users grew by 40% to 130.3 million. The number of mobile active users rose 46% annually to 116.1 million. Daily active users grew 41% to 37.9 million, while revenue per mobile active users rose by 24% to RMB15.4. The non-game revenue per mobile active users rose by 83% to RMB8.7.

Revenues from advertising jumped by 81% as the enhancement of recognition of Bilibili’s brand name in China’s online advertising market drove revenues from brand advertising and performance-based advertising higher. Revenues from e-commerce and others surged by 241% on higher sales of products through its e-commerce platform.

For the first quarter, the company expects net revenue to be in the range of RMB2.15-2.20 billion, which is above the consensus estimates of RMB2.08 billion.

For 2020, the company intends to continue to cultivate a healthy content ecosystem and increase its community bond to further its growth momentum. The company intends to convert its fast-growing traffic to paying users with diverse premium content and services.

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