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.