STOCKS | JPMorgan Names Bilibili Top Digital Entertainment Pick, Cuts Target Price

JPMorgan has named Bilibili its top pick in the digital entertainment sector, replacing NetEase, while cutting its target price on the Hong Kong-listed shares to HK$170 from HK$270 and on the U.S.-listed shares to $22 from $35, according to ETNet. The bank kept an Overweight rating on Bilibili, saying the risk of shareholder selling has been removed after Tencent converted about 9% of its stake into a $200 million convertible bond. It also cited an upcoming new game release cycle as a catalyst for a re-rating, with two to three new games expected in 2026 and 2027 starting from September 2026. JPMorgan expects Bilibili's game revenue to return to year-on-year growth in the fourth quarter of 2026 and rise 22% in 2027, after an estimated 8% decline in 2026. It also forecast net profit growth of 31% year on year in 2027 and 2028, saying AI investment should remain manageable because the company is focusing only on content recommendation and creation-related areas. The stock currently trades at 11 times and 9 times forecast 2027 and 2028 earnings, respectively. The next potential catalyst is the global launch of Lumi Master on September 17.