The Zhitong Finance App learned that Morgan Stanley released a research report saying that it is more optimistic about Kuaishou-W (01024)'s stock price outlook for the next 1 to 2 years, and is optimistic that fundamental developments will bring profit. The report maintained the “gain” rating and raised the 2024 adjusted net profit forecast of 6% to RMB 17 billion, saying that it has shown strong cost control capabilities, gross margin has continued to improve, and marketing costs for active daily users have continued to decline for the past three years. I believe the profit margin is expected to increase further, with a target price of HK$95.

According to the forecast, Kuaishou's advertising revenue in the first quarter of this year increased 27% year over year, mainly driven by strong healthy internal and external advertising growth; further increase in ad load; and adoption of the “Kuaiyi” AI model. It is expected that advertising revenue for the whole year will increase 25% year over year. In terms of e-commerce business, SKU (inventory unit) and monthly active customer penetration rate are expected to increase, leading to a 25% year-on-year increase in GMV (total product transaction value) and a 30% increase in e-commerce revenue this year.