The Zhitong Finance App learned that recently, Kuaishou-W (01024) announced the results for the year ending 2023. During the period, the company achieved revenue of 113.47 billion yuan (RMB, same below), an increase of 20.5% over the previous year; gross profit of 57.391 billion yuan, an increase of 36.2% over the previous year. Adjusted net profit of 10.271 billion yuan, turning a year-on-year loss into a profit. In the fourth quarter of 2023, Kuaishou achieved total revenue of 32.6 billion yuan, an increase of 15% year on year, and adjusted net profit of 4.4 billion yuan, an increase of 30% year on year, which greatly exceeded market expectations.

Due to the impact of performance exceeding expectations, Kuaishou's stock price rose by more than 10% in March, and the biggest increase of more than 44% from the February low.

After Kuaishou released its 2023 results announcement, several major banks published performance reviews and research reports, believing that the company's performance exceeding expectations will continue to be achieved in the future.

ICBC International believes that the company's monthly active users reached a record 704 million and daily active users reached 382.5 million, indicating a healthy increase in platform traffic. With the further strengthening of the content ecosystem, Kuaishou's online advertising and e-commerce have maintained a strong growth momentum.

According to Kuaishou's financial report, Kuaishou's advertising sector revenue in 2023 increased 23% year-on-year to 60.3 billion yuan, far exceeding the industry average; e-commerce GMV surpassed trillion yuan for the first time and reached 1.18 trillion yuan. Driven by e-commerce business growth, Kuaishou's revenue from other service sectors increased 44.7% from 9.8 billion yuan in 2022 to 14.1 billion yuan.

Jefferies believes that as a leading live streaming platform, Kuaishou is a key beneficiary of short video and live streaming consumption in China. The platform has a highly attractive social ecosystem and can meet the diverse content needs of users. At the same time, Kuaishou has executed well in multiple business models, and is expected to seize new business opportunities and the development of the entire industry.

According to public information, Kuaishou has focused on investing in local business since last year. In the fourth quarter, local lifestyle transactions increased 25 times year-on-year, and the average number of daily payment users increased by more than 40% month-on-month. The company intensively arranged a big promotion for group purchases in the second half of last year, which directly increased the penetration rate of local lifestyle users by 227%. In 2024, Kuaishou plans to invest 1 billion in platform subsidies and 100 billion in traffic to support 1,000 million GMV brands in the group buying business, and is committed to improving the conversion efficiency of merchant marketing and transactions.

Looking ahead to the future market, Morgan Stanley expects that Kuaishou's main business revenue growth will continue to exceed market expectations in the first quarter of this year, maintaining a steady increase in market share and operating leverage ratio. The bank also believes that Kuaishou's price-earnings ratio (P/E) and market-sales ratio (EV/S) at this stage are lower than other companies in the same industry.

Additionally, J.P. Morgan gave Kuaishou an “overrated” rating, with a target share price of HK$95.00; UBS gave Kuaishou a “buy” rating, with a target share price of HK$85.00. CMB International maintains Kuaishou's “buy” rating and maintains a target price of HK$97 based on a partial summation valuation.