Kuaishou delivered another upbeat quarter, with topline/bottom line +17%/+10,348% YoY (1%/37% above consensus). We expect such margin surprise with a HK$16bn new share repurchase program should help its re- rating. We reiterate our confidence on KS's resilient growth and earnings upside, and expect a solid 2Q24E ahead. We forecast 2Q24E revenue +9.5% YoY, with ads and other services revenue resilient at +22.5%/24% YoY. 2Q24E bottom line may reach RMB4.4bn (13% above consensus), in our estimates. With enhanced monetization, operating leverage and overseas business narrowing loss, we are more bullish on its margin outlook. We lift our earnings forecast by 7.3%-7.6% in FY24-26E, with TP at HK$97 (unchanged).

Margin beat again, with HK$16bn new share repurchase program.

1Q24 beat on margin again, with revenue +17% YoY (1% above consensus) and bottom line at RMB4.4bn (37% above consensus). By segment, livestreaming/ads/other services rev was -8%/+27%/+48% YoY, of which other services revenue beat our estimates by 5%. Adj. NPM improved QoQ to 14.9% in 1Q24 (vs. consensus of 11%), mainly on a better GPM and narrowing loss of overseas business. 1Q24 DAU grew 5% YoY to 394mn, backed by enhanced algorithms and rich content supply. KS announced a new on-market share repurchase program up to HK$16bn over the next 36 months.

Ads & ecommerce to sustain solid momentum in 2Q24E. For 2Q24E,

we expect KS's traffic to trend well, with estimated DAU +4% YoY. We remain positive on KS's ads & ecommerce monetization and earnings growth, and forecast total revenue +9.5% YoY in 2Q24E. Ads segment should continuously benefit from rising budgets for game launches, booming mini-dramas and vocational training. We forecast ads revenue +22.5% in 2Q24E (largely in line with consensus). We forecast ecommerce GMV/other services revenue to grow 25%/24% YoY in 2Q24E, supported by rich offerings, rising MAC and shelf-based mall penetration. Given a high base in 2Q, we estimate livestreaming revenue to decline 14% YoY, but full-year revenue of -8% YoY is unchanged. We forecast adj. net profit at RMB4.4bn in 2Q24E (13% above consensus), backed by an improving GPM (+4ppts YoY) and disciplined R&D and G&A spending. To factor in a better margin profile, we revise up FY24E adj. net profit forecast to RMB17.2bn (vs. prior RMB16bn).

Maintain BUY. We lift our FY24-26E earnings forecast by 7.3%-7.6%, but maintain SOTP-based TP at HK$97. Catalysts: 1) more earnings upside; and 2) decent quarterly results.