Description of the event
The company announced financial results for Q4 '23 and the full year '23. Kuaishou achieved full-year revenue of 113.47 billion yuan, up 20.5% year on year, of which 23Q4 achieved revenue of 32.561 billion yuan, up 15.1% year on year; non-GAAP net profit for the full year of '23 was 10.271 billion yuan, turning a year-on-year loss into profit. Of these, 23Q4 non-GAAP net profit was 4.362 billion yuan, which continued to increase from month to month. Kuaishou's adjusted net profit for the whole year and profit for the period turned a loss into a profit, fully entering the profit era.
Incident comments
Revenue side: Kuaishou's online marketing service revenue in '23 was 60.3 billion yuan, up 23.0% year on year, of which 23Q4 revenue was 18.2 billion yuan, up 20.6% year on year. Driven mainly by internal circulation, thanks to refined operation, intelligent marketing and continuous optimization of algorithms, the number of advertisers and marketing consumption has increased; in terms of search business, the weight of social relationships and useful content has increased in the construction of the “post-search” scenario, and 23Q4 search marketing service revenue increased nearly 100% year over year. Kuaishou achieved live streaming service revenue of 39.1 billion yuan in 2013, an increase of 10.4% over the previous year. Of these, 23Q4 revenue was 10 billion yuan, which was the same as the previous year. The company promoted innovations in gameplay such as live streaming of multiplayer scenes and virtual people, and continued to strengthen the introduction of guilds and anchors. The number of unionized anchors signed by the 23Q4 trade union increased nearly 40% year on year; the “live streaming +” model empowered traditional industries. The average number of daily resume deliveries for the 2023Q4 quick hire business increased by more than 200% year on year, and Ideal Home real estate transaction volume exceeded 16 billion yuan. Kuaishou's revenue from other services in '23 was 141 billion yuan, up 44.7% year on year, of which 23Q4 revenue was 4.3 billion yuan, up 36.2% year on year, mainly due to the growth of e-commerce business. Along with the improvement of e-commerce operation strategies, the increase in the number of paying users and retail merchants led to an increase in transaction volume. E-commerce GMV reached 1.18 trillion yuan in 2023, breaking the trillion scale for the first time. Among them, the 23Q4 e-commerce GMV increased 29.3% year-on-year to 403.9 billion yuan, a record high in a single quarter; the company strengthened e-commerce ecological infrastructure construction, and the 23Q4 pan-shelf GMV accounted for more than 20%, and short video GMV increased by more than 100% year on year.
Operating data: The number of Kuaishou users grew steadily. In 23Q4, the number of daily active users increased 4.5% year over year to 383 million, and monthly active users increased 9.4% year over year to 700 million; the number of users in overseas core markets increased steadily, and the number of daily active users and usage time in Brazil, Indonesia and other regions increased year on year. The company continues to optimize the content supply ecosystem and diversify monetization channels. By the end of 2023, Kuaishou Starlight had launched nearly 1,000 short series, with over 300 popular skits streaming exceeding 100 million. The number of users of 2023Q4 Kuaishou watching more than 10 episodes of heavy skits every day reached 94 million, an increase of more than 50% over the previous year; building a warm online community in the Sannongchui category, the supply of short video works by 2023Q4 Wanfan creators increased by more than 30% year on year.
Profit side: Kuaishou's domestic operating profit increased from 192 million yuan in 2022 to 11.402 billion yuan in 2023, of which 23Q4 domestic operating profit was 4.250 billion yuan, mainly due to increased domestic revenue; 23Q4 overseas operating losses narrowed sharply from 1,499 billion yuan in the same period in 23 to 551 million yuan, mainly due to rapid growth in overseas revenue and improved marketing expenditure efficiency. Kuaishou's gross margin in 2023 was 50.6%, up 5.9pct year over year. The sales expense ratio fell to 32.2% from 39.4% in 2022. The company optimizes channel growth efficiency, controls user acquisition and retention expenses, and continues to reduce customer acquisition costs.
Profit forecast: The company expands the supply of content to meet the diverse needs of users, and the e-commerce business continues to play its main role in driving rapid revenue growth. We expect revenue of 2024-2025 to reach 126.05 billion yuan and 142,011 billion yuan, respectively, and non-GAAP net profit of 16.053 billion yuan and 24.302 billion yuan, respectively, maintaining the “buy” rating.
Risk warning
1. The market competition pattern intensifies risks;
2. Content regulation risks.