Deutsche Bank has released a quick announcement that downgrades the earnings forecast of Kuaishou-W (01024.HK) for 2024 to 2026 by 3% to 6% per share, mainly due to the weak macroeconomic conditions in China that have led to a downward revision of Gross Merchandise Volume (GMV) and advertising revenue forecasts. The corresponding target price is lowered from 55 yuan to 50 yuan. The rating is "synchronized with the broader market".

Deutsche Bank expects that Kuaishou's second-quarter revenue and adjusted net profit will be RMB 30.2 billion and RMB 4.4 billion, respectively, with a year-on-year growth of 9% and 62%, which is consistent with market expectations. For the third quarter, the bank downgraded its forecasts for advertising business and other revenues to a year-on-year growth of 17% and 16%, respectively, lower than market expectations.

In addition, the National Development and Reform Commission has issued a consumer trade-in program covering eight home appliance categories, with each consumer in each category eligible for a subsidy on one product, up to a maximum of 20% of the retail price. The bank estimates that Kuaishou can obtain 10% to 15% of GMV from these segmented markets.