Bilibili (BILI.O): Expecting 3Q26E Largely Inline; Pressure on ads from Macro Softness

Bili is likely to report its 3Q26 results ~mid to late-Nov, and we expect revs slightly below but adj. OP in line with VisibleAlpha consensus. The ads growth could be slightly slower than our previous projection given the continuous weak consumption and macro softness, and we see further slow-down in ads likely into 4Q26E, while the gaming business could be largely on track with Lumi Master launched in Sep. That said, although 3Q26E adj. OP could be in line with our previous expectations, the further slow-down in ads could drag margin performance a bit in 4Q26E. As such, we lower 2026/27/28E earnings estimates by 3/2/1% respectively, and our TP is adjusted to US$26.5 from US$27 accordingly. Despite external pressures, Bili's ads growth could still outperform the industry and key leading peers, and we see the release of SanWang in the year-end as the key catalyst to the stock. Maintain Buy. We project total revs to grow 7.1% yoy to Rmb8.23bn in 3Q26E, driven by -8/+20/+5/0% yoy on gamin