Domestic business is developing steadily, and overseas business continues to reduce losses. 24H1, the company's revenue was 60.383 billion yuan (+14% year over year), profit for the period 8.1 billion yuan, and adjusted net profit of 9.067 billion yuan. Among them, in 24Q2, the company's revenue was 30.975 billion yuan (YoY +11.6%, +5.3%); gross profit margin 55.3% (YoY +5.1pct, month-on-month +0.5pct); sales and marketing expenses accounted for 32.4% of revenue (YoY +1.3pct), mainly due to increased expenditure on promotion activities; administrative expenses accounted for 2.6% of revenue (-0.8pct yoy), and R&D expenses accounted for 9.1% of revenue (YoY -2.3 pct), mainly due to employee benefit expenses (including related share-based compensation expenses) Decrease; profit for the period was 3.98 billion yuan, adjusted net profit was 4.679 billion yuan; adjusted profit margin was 15.1% (+5.4 pct year over year, +0.2 pct month on month). 24H1, overseas revenue of 1.1 billion yuan (YoY +141.4%, month-on-month +8.9%) and operating loss of 0.277 billion yuan (YoY -64.5%), is mainly due to the continuous year-over-year and month-on-month growth of the company's overseas online marketing business revenue, improvement in overseas monetization efficiency, and continuous release of operating leverage benefits.
Build a healthy and dynamic content creation ecosystem, deepen high-quality growth strategies, and continue to grow with high quality users.
The number of daily active users and monthly active users of the 2024Q2 and Kuaishou apps grew to 0.395 billion (+5.1% year over year) and 692 million (+2.7% year over year), respectively. The average daily usage time reached 122 minutes, and the total usage time increased 9.5% year over year, achieving high-quality user growth. Through native sports content, short dramas combined with smart AI, etc., we will continue to create high-quality content unique to the platform through differentiated operating strategies.
The growth rate of external circulation advertising is increasing, and internal circulation advertising is growing steadily. 2024Q2, Kuaishou's online marketing service revenue was 17.5 billion yuan (+22.1% year-on-year, +5.2% month-on-month); external circulation marketing service revenue increased year-on-year compared to Q1, especially in media consulting, e-commerce platforms, and local lifestyle; internal circulation marketing service revenue growth was steady, mainly through continuous optimization of intelligent product delivery strategies and capabilities, providing product portfolios to improve the stability and efficiency of independent marketing for merchants, and create unique brand marketing, and star short drama titles.
The year-on-year growth rate of e-commerce GMV slowed compared to Q1. Pan-shelf e-commerce GMV accounted for more than 25%, and diversified global operations continued. 2024Q2, Kuaishou's revenue from other services was 4.2 billion yuan (+21.3% year over year), mainly due to Kuaishou Q2 e-commerce GMV increasing 15% year over year to 305.3 billion yuan (+6% month over month), and the year-on-year growth rate slowed compared to Q1; monthly active buyers increased 14.1% year over year to 0.131 billion, and the monthly active user penetration rate reached 18.9%, while the number of sales merchants increased by more than 50% year on year. In addition, 2024Q2, Kuaishou's pan-shelf e-commerce GMV accounts for more than 25% of the total GMV, making it an important growth point for e-commerce business.
The live streaming business continues to iterate and refine operations to achieve a healthy and positive live streaming ecosystem. 2024Q2, Kuaishou's live streaming business revenue was 9.3 billion yuan (-6.7% YoY). On the supply side, the company has set up regional teams to introduce high-quality new clubs through accurate industry publicity and influential offline presentations; attract mid-level anchors, enhance interactive live streaming gameplay, and encourage anchors to produce high-quality content. At the same time, the “live streaming +” model continues to empower traditional industries. 2024Q2, the average number of daily resume submissions for the Kuaishou Quick Hire business increased by more than 130% year over year, the match rate increased by more than 150% year over year, and the average daily search scale of the Ideal Home business increased 9 times year over year.
Profit forecasting and valuation. We estimate that the user side assumes that the company's 2024-2026 DAU users will be 0.398 billion, 0.404 billion, and 406 million; MAU will be 0.7 billion, 0.714 billion, and 722 million, respectively, and the number of users will continue to maintain effective penetration. Revenue: 1) Online marketing services: The company's average monthly DAU marketing service revenue in 2023 was 13.23 yuan (+15.1% year over year). We expect the company's average monthly DAU marketing service revenue for 2024-2026 to be 15.34 yuan, 17.34 yuan and 19.07 yuan, respectively, with year-on-year growth rates of 16%, 13% and 10% respectively; online marketing service revenue is expected to be 73.322 billion yuan, 83.994 billion yuan, and 92.987 billion yuan, respectively, with a year-on-year growth rate of 21.6%. 14.6% and 10.7%. 2) Live streaming business: We predict that the number of monthly live streaming paying users in 2024-2026 will be 52.52 million, 51.47 million, and 50.96 million, respectively, a year-on-year decrease of 1.2%, 2% and 1%; monthly live streaming revenue will be 57.84 yuan, 57.26 yuan, and 57.26 yuan, respectively, down 5.5%, 1%, and 0% year-on-year; the revenue from the live streaming business will be 36.454 billion yuan, 35.368 billion yuan, and 35.014 billion yuan, respectively. It declined 6.7%, 3%, and 1%. 3) E-commerce business: We expect the company's e-commerce transaction scale to be 1385.7 billion yuan, 1593.6 billion yuan and 1784.8 billion yuan respectively, with year-on-year growth rates of 17%, 15%, and 12% respectively; e-commerce sales take rates are 1.20%, 1.23%, and 1.24% respectively; assuming that e-commerce business accounts for 96.8%, 96% and 95% of other business revenue, respectively, the company's other business revenue in 2024-2026 will be 17.236, respectively billion yuan, 20.484 billion yuan, and 23.371 billion yuan, year-on-year increases were 22.1%, 18.8%, and 14.1%, respectively.
Overall, we expect the company's revenue for 2024-2026 to be 127.011 billion yuan, 139.845 billion yuan, and 151.372 billion yuan, respectively, with year-on-year growth rates of 11.9%, 10.1% and 8.2% respectively; net profit to mother is 14.632 billion yuan, 19.541 billion yuan, and 23.891 billion yuan, respectively, with year-on-year growth rates of 128.8%, 33.6% and 22.3%, respectively. Using the PE valuation method, referring to the average PE valuation of comparable companies in 2024, the company was given a 12-15 times PE valuation in 2024, based on RMB 1 = HK$1.0978, corresponding to a reasonable value range of HK$44.47-55.59 per share, taking into account the company's own business and profit development stage. Using the P/S segmented valuation method, referring to the 2024 average PS valuation of e-commerce business, marketing business, and live streaming business, respectively, we gave the company 1.5-2.0 times PS valuation for e-commerce business, 1.5-2 times PS valuation for marketing business, and 1 times PS valuation for live streaming business, calculated as 1 yuan = HK$1.0978, corresponding to a reasonable value range of 43.64-55.11 HKD/share. Based on the principle of prudence, we combined the PE and PS valuation methods and used the lower average and upper mean values of the two, respectively. We believe that the reasonable value range for the company is HK$44.06 per share - HK$55.35 per share, giving it a “superior to the market” rating.
Risk warning: Live streaming business policy supervision risks, e-commerce business development falls short of expectations.