On May 23rd, the main stock indexes of Hong Kong showed a volatile decline, and the Hang Seng Tech Index fell 2.41%. In the generally depressed market, Kuaishou (01024) benefited from its first-quarter performance and opened 4% higher in the morning. The volume and price rose together throughout the day, and it rose against the trend by 1.72%. The closing price was HKD 59.15 per share, with a turnover of nearly HKD 4.8 billion that day.

On the 22nd, Kuaishou released its performance report for the first quarter of 2024. The company's Q1 revenue was RMB 29.408 billion, a year-on-year increase of 16.6%. The adjusted net profit was RMB 4.388 billion, which exceeded Bloomberg's market expectation of RMB 3.198 billion, and the year-on-year growth rate exceeded 100 times. The platform's user traffic maintained steady growth, and the total usage time of Q1 users increased by 8.6% year-on-year. The e-commerce business GMV grew by 28.2% year-on-year to RMB 288.1 billion, and the general merchandise shelf and short video e-commerce shopping scenes continued to enrich.

In addition, Kuaishou also announced that the company will repurchase Class B ordinary shares worth no more than HKD 16 billion in the next 36 months. Bank of America analysts believe that this will bring investors in Kuaishou's stock a annualized return of about 2%.

Before the financial report was released, Kuaishou officially launched the 618 e-commerce promotion on the platform. The promotion cancelled pre-sales and sold goods in stock. The company also announced incentive policies such as RMB 1 billion in red envelope subsidies.

Bank of America predicts that the 618 promotion will drive Kuaishou's GMV growth in the second quarter by more than 25% year-on-year and maintain a high level of profitability similar to the first quarter. Therefore, analysts have raised their profit expectations for 2024 and 2025.

Driven by the favorable performance, several institutions have raised their target price expectations for Kuaishou.

China International Capital Corporation maintains its "outperforming the industry" rating on Kuaishou and raises its target price by 7% to HKD 75. Bank of America, based on the positive profit growth trend, maintains its "buy" rating while giving Kuaishou a target price of HKD 78. JPMorgan believes that the strong growth in e-commerce GMV and an increase in group profitability will enhance investors' confidence in Kuaishou's sustainable growth, and gives the company an "overweight" rating with a target price of HKD 95.