(Yicai) Nov. 15 -- Bilibili’s stock price dived despite the Chinese video-sharing and gaming platform turning a profit for the first time in the third quarter after a surge in revenues from mobile gaming and advertising.

Bilibili [HKG: 9626] closed down 10 percent at HKD146.10 (USD20.22) a share today. The wider Hong Kong market ended little changed.

Bilibili had an adjusted net profit of CNY236 million (USD32.7 million) in the three months ended Sept. 30, the company’s earnings report showed yesterday. Its net loss shrank 94 percent to CNY79.8 million from a year ago, while revenue jumped 24 percent to CNY7.31 billion (USD1.01 billion).

“This milestone is just a new starting point,” Chairman and Chief Executive Chen Rui said in a statement. “Going forward, we will further develop our commercial capabilities while reinforcing our community ecosystem, bringing long-term value to all of our stakeholders.”

Revenue from advertising jumped 28 percent to CNY2.09 billion, while mobile gaming income soared 84 percent to CNY1.82 billion. Gross profit surged 76 percent, while gross profit margin expanded for the ninth straight quarter to 34.9 percent.

In the past two years, management has prioritized shrinking losses and improving finances. Bilibili narrowed its net loss 36 percent to CNY4.8 billion last year and 61 percent to CNY608 million in the second quarter of this year.

Chen has repeatedly said that the Shanghai-based company will break even this year. “We are confident that in Q3 of 2024, profits will turn positive,” he noted on the firm’s 2023 annual earnings conference call.

Bilibili had cash and cash equivalents, time deposits, and short-term investments of CNY15.23 billion as of Sept. 30.

Editor: Tom Litting