2024Q1 revenue grew steadily, and profits exceeded expectations. Kuaishou achieved revenue of 29.4 billion yuan in 2024Q1, YOY +17%.
Among them, advertising/livestreaming/e-commerce and other revenue was 167/86/42 billion yuan, yoy +27%/-8%/+48%.
The company's Q1 gross profit margin was 54.8%, yoy+8.4pct. The company's Q1 sales, management and R&D expenses were 31.9%/1.6%/9.7%, yoy-2.7/-2.1/-1.9pct, respectively. The company's Q1 adjusted net profit of 4.39 billion yuan, with an adjusted net profit margin of 14.9% and yoy+14.7pct, exceeding market expectations. Q1 Kuaishou DAU and MAU were 394/697 million, yoy +5.2%/6.6%. Q1 The average daily usage time for daily active users is 129.5 minutes.
E-commerce: Strong performance in diverse markets, and the number of buyers continues to grow. Q1 E-commerce GMV reached 288.1 billion yuan, yoy +28%.
On the user side, the average number of 2024Q1 monthly buyers reached 126 million, yoy +22.4%. On the supply side, the average sales volume in Q1 increased by more than 70% year-on-year. Kuaishou accelerated the promotion of pan-shelf e-commerce layout. Q1 Pan-shelf accounted for 25% of the total GMV, and Kuaishou Mall orders also increased 98% during the New Year Festival. In the short video sector, short video e-commerce GMV grew at a year-on-year rate of nearly 100%. As Kuaishou e-commerce has a rich supply side and the layout of multiple marketplaces such as shelf e-commerce, promoting the penetration of e-commerce users and increasing the frequency of purchases, we expect e-commerce GMV to continue to maintain a high growth rate in 2024.
Advertising: Marketing products have been upgraded, and both internal and external circulation have grown strongly. Q1 Kuaishou advertising revenue yoy +27%, accounting for 56.6% of total revenue. Kuaishou promoted the application of intelligent marketing solutions in various scenarios, and the number of active marketing customers in Q1 increased 90% year-on-year. Q1 Kuaishou single DAU advertising yoy +21% to 42.3 yuan. In terms of internal circulation, Kuaishou continues to upgrade intelligent marketing launch products. The total consumption of Q1 merchants using sitewide promotion products or smart hosting products for marketing promotion reached 30% of the total internal circulation consumption. In terms of external circulation, Q1 achieved strong year-on-year growth, and the media information, gaming, education and other industries performed well.
Live streaming continues to be under pressure, and the innovative business is progressing smoothly. Due to the continuous promotion of content ecological governance, Q1 live streaming revenue declined year-on-year, and we expect the short-term live streaming growth rate to remain under pressure. In terms of new business, according to the performance report, the average number of daily sales merchants and products of Kuaishou Local Life increased 29% and 38% month-on-month in Q1. The average number of daily resume posts in the Quick Hire business also increased by more than 180%, and the average number of daily users posted also increased by 120%. Ideal Home covers more than 100 cities and cooperates with more than 50,000 anchors.
AI: Empower business and accelerate applications. According to the performance report, in terms of empowering the business, the Q1 model supports intelligent marketing solutions and has achieved results in intelligent creative production, marketing delivery, and interactive acceptance. In terms of business scenario applications, Kuaishou clarified the big model application strategy for upgrade understanding, good interaction, and exploration generation this quarter. 1) Understanding the content:
The multi-modal big language model helps to deepen the understanding and exploration of user interests in live short video broadcasts, comment areas, and increases the accuracy of content recommendations. 2) AI interaction: Improve the accuracy of AI's quick responses, and launch multi-round conversation and graphic functions. Q1 The penetration rate of AI Xiaokuai users increased dramatically, and the peak number of users using AI Xiaokuai in a single day exceeded 1.5 million. 3) Digital people and AIGC: Covers multiple scenarios such as short video live streaming and intelligent customer service to provide customers with short video script production, material mining, and automatic streaming. Q1 The daily peak consumption of AIGC live streaming and short video footage exceeded 10 million.
Investment advice: Maintain a “buy” rating. The estimated revenue for 2024-2026 is 1258/1417/155.7 billion yuan, an increase of 11%/13%/10%, and adjusted net profit of 170/218/28.3 billion yuan, an increase of 65%/29%/30%. Kuaishou was given a target price of HK$80, corresponding to 15 x 2025e P/E, maintaining a “buy” rating.
Risk warning: The number of Kuaishou users has fallen short of expectations, demand for advertising has declined, changes in the macro environment have exceeded expectations, and the impact of industry policies on business has exceeded expectations.