occurrences
The company released its 24Q1 financial report. In 24Q1, Kuaishou achieved revenue of 29.408 billion yuan (YoY +16.6%), better than Bloomberg's forecast of 29.044 billion yuan (YoY +15.2%); 24Q1 adjusted net profit to the mother reached 4.388 billion yuan, which was significantly better than Bloomberg's forecast of 3.198 billion yuan.
Among them, 24Q1 domestic revenue was 28.417 billion yuan (YoY +14.2%), foreign revenue was 991 million yuan (YoY +193.2%); 24Q1 domestic operating profit increased 314.4% year over year to 3,991 billion yuan, and foreign operating losses narrowed 67.4% year on year to 268 million yuan.
In terms of traffic: DAU and MAU have been growing steadily, and the supply of rich content has increased user retention in 24Q1. The company's DAU reached 394 million (YOY +5.2%), MAU reached 697 million (YOY +6.6%), and the average daily usage time of active daily users was 129.5 minutes.
In terms of content supply, the company continuously enriches platform content, uses algorithms to increase user growth ROI, and at the same time create differentiation to enhance user stickiness. Among them, the Kuaishou Starlight skit performed well during the Spring Festival in '24, with 21 short dramas that surpassed 100 million broadcasts, and 7 skits with over 300 million broadcasts.
In terms of search business, the company uses big language model technology to optimize search functions, improve the implementation of “search after reading” scenarios, and continuously increase user penetration. The number of Kuaishou search users increased by more than 15% year on year in 24Q1, the number of searches peaked at nearly 800 million times in a single day, and search marketing service revenue increased 50% year over year.
Online marketing services: AIGC provides intelligent marketing solutions 24Q1. The company's online marketing service revenue reached 16.650 billion yuan (YoY +27.4%), better than Bloomberg's estimate of 16.499 billion (YOY +26.3%).
Internal circulation: Thanks to the steady growth of e-commerce GMV and the application of smart hosting products, the total consumption of 24Q1 merchants using site-wide promotion products or smart hosting products for marketing accounts for 30% of the internal circulation. Furthermore, the platform relies on AI models to improve intelligent full-link solutions for customers to improve the quality and efficiency of customer marketing.
External circulation: Thanks to UAX, an intelligent delivery product, customized full-cycle automated delivery solutions for customers, the consumption of marketing through UAX increased more than 4 times over the previous month. Industries such as media information, games, education and training showed outstanding performance. Among them, marketing consumption in the education industry doubled year-on-year. Through self-built links, paid skits achieved a year-on-year increase in the average daily paid consumption of 24Q1 skits by more than 4 times over the same period last year.
Other services (including e-commerce): two-way drive content and shelves, enabling e-commerce business to continue to grow
Revenue from other services reached 4.183 billion yuan (YOY +47.6%), and the 24Q1 e-commerce business GMV increased 28.2% year-on-year to 288.1 billion yuan.
On the user side, active buyers in January 24Q1 reached 126 million, an increase of 22.4% year on year; thanks to the continuous enrichment of shopping scenarios such as pan-shelf and short video e-commerce and the upgrading of marketing gameplay, the average number of daily buyers in the 24Q1 mall increased by more than 70% year-on-year, and the 24Q1 pan-shelf GMV increased by more than 25%, accounting for 25% of the total GMV, and the average daily growth rate of pan-shelf daily buyers.
On the supply side, the company continues to provide preferential policies for merchants to support their growth in multiple ways.
In January 24Q1, the number of sales merchants increased by about 70% year on year, and the average number of new entrants per month continued to grow rapidly year on year. Among them, the average daily sales rate of pan-shelf sellers increased by more than 50% year on year.
Live streaming reward business: Continuously innovate live streaming gameplay and build a harmonious live streaming ecosystem 2024Q1. The company's live streaming business revenue reached 8.575 billion yuan (YOY -8%).
The company strongly supports mid-level anchors, promotes live streaming of multi-person scenes, innovates gameplay, and enriches the live streaming ecosystem. The number of guild agencies and anchors signed up for 24Q1 increased by 50% over the same period last year.
In addition, the “Ideal Home Business” and “Live Streaming +” businesses are also growing steadily. The “Lunar New Year Recruitment Fair” was launched during the Spring Festival. The average number of daily resume submissions increased by more than 180% year over year, and the average number of daily users posted also increased by more than 120% year over year. Ideal Home's business covers more than 100 cities across the country, with more than 50,000 partner anchors.
Overseas business: Strengthen overseas localization strategies, and operating losses continued to narrow in 24Q1. Overseas market revenue reached 991 million yuan (YOY +193.2%). Operating losses narrowed 67.4% from the same period last year to RMB 268 million.
In terms of traffic, the company continues to enrich the supply of high-quality content and steadily increase the daily active users and user usage time in core overseas markets; in terms of online marketing, the company strengthened its localized marketing capabilities and used marketing nodes to achieve both brand quality and efficiency, and 24Q1 overseas marketing revenue increased nearly 3 times over the same period last year.
Stock buyback: The buyback plan shows the confidence of the company's management
The company plans to repurchase no more than HK$16 billion of shares within the next three years, taking into account cash flow and profits for the next three years, demonstrating the company's return to investors and confidence in the company's value.
Investment advice
The company's total revenue for 24-26 is estimated to be 1275.8/1455.7/164.05 billion yuan (the value was 133.27/151.26 billion yuan before 24-25); the company's NON-GAAP net profit profit for 24-26 is estimated to be $187.4/248.2/32.4 billion yuan ($163.4/23.18 billion 24-25 years ago), maintaining a “buy” rating.
Risk warning
The growth rate of advertising and e-commerce fell short of expectations; the competitive landscape of the industry deteriorated; the risk of the international situation; overseas business losses fell short of expectations, etc.