U.S. Stock Market News | Bilibili leads the surge of Chinese concept stocks, rising 15% and receiving a rating upgrade from Goldman Sachs
Bilibili's stock price rose by 15.44% on Thursday, closing at $21.09, influenced by Goldman Sachs' rating upgrade. Goldman Sachs upgraded its rating from "Neutral" to "Buy" and raised the target price from HKD 129 to HKD 176, expecting the company to enter a profit growth cycle benefiting from advertising and gaming businesses. Goldman Sachs also predicted that earnings per share for 2025-26 will exceed market expectations by 40%
According to Zhitong Finance, Bilibili (BILI.US) saw its stock price rise on Thursday, closing up 15.44% at $21.09. On the news front, boosted by China's economic stimulus policies, Chinese assets continued their rally overnight, with the Nasdaq Golden Dragon Index rising by 10.9% on "Super Thursday." Billionaire investor David Tepper even suggested investing in "buying everything" related to China.
Tepper is not the only one bullish on the Chinese stock market. Goldman Sachs' bulk brokerage business saw hedge funds aggressively buying Chinese stocks on Tuesday, while Morgan Stanley strategist Laura Wang expects the CSI 300 Index to rise another 10% in the near term. Prior to the recent stock market rally, Tepper and Michael Burry of Scion Asset Management (the prototype character in the movie "The Big Short") were among the few hedge fund investors bullish on the Chinese stock market.
Furthermore, Goldman Sachs released a research report raising the rating of Bilibili-W (09626) from "Neutral" to "Buy" and increasing the target price from HKD 129 to HKD 176, as the company is entering a profit growth cycle, strengthening its business model, and benefiting from high-profit advertising and gaming businesses.
The firm believes that the company's net profit margin will reach 10% to 15% by 2026, driven by market financial forecast upgrades in the next 6 to 12 months, due to a strong new game lifecycle, faster advertising growth than peers, and cost discipline improvements. The market still undervalues its gaming business contribution and advertising monetization potential, supporting the firm's forecast of 40% higher-than-market-expected earnings per share for 2025 to 2026.
Goldman Sachs raised the company's gaming revenue forecast, with figures for 2024 to 2025 exceeding market expectations by about 12%; higher profit estimates, expecting operating profit margins of 7% and 12% for 2025 to 2026; raising earnings per share forecasts for 2025 to 2026 by over 60%. The current target price reflects a forecasted P/E ratio of 16 times for 2026, an enterprise value multiple of 9.5 times, with the firm believing the premium valuation is still fair compared to peers
