Company news
The company's recent situation
The company held the Kuaishou Ecological Open Conference on December 27 to announce the “one-stop open platform” for the digital marketplace ecosystem; held the Kuaishou E-commerce Service Provider Ecology Year-end Summit on the 30th to release Kuaishou E-commerce Service Provider System 2.0; at two meetings, business leaders also expressed their views on the Kuaishou platform ecology and commercialization.
reviews
Build a digital marketplace to help open up and coexist. The company said that Kuaishou has now moved from the tool and content stage to the ecological stage. Benefiting from advanced content forms and a diverse creator ecosystem, Kuaishou is gradually building a new business ecosystem for the digital market. The company pointed out that Xinshang commercial has the three advantages of broad public space, sticky private domain, and closed loop business area. The Kuaishou digital marketplace connects consumers, content, products, services, creators, operators and platforms, achieving the closed-loop demand of “what you see is what you get” users, achieving the effect of fully empowering ecological partners. Kuaishou currently has 140 million users visiting the operator's homepage every day, and the MAU of the applet has exceeded 100 million. Based on the digital market ecosystem and the business concept of openness and win-win, combining private sector advantages and trust economy, Kuaishou officially released the “One-stop Open Platform” to lower the platform's commercial threshold, open up full-link business scenarios, and drive long-term operation. Furthermore, Kuaishou launched the “Cohesion” program to support businesses in various industries in four areas: talent matching, traffic support, cash incentives, and service provider support.
Reached strategic cooperation with Meituan to promote connectivity. The company announced at the Ecological Conference that it has reached an interconnection strategy cooperation with Meituan. Meituan will launch the Meituan Mini Program on the Kuaishou platform to provide Meituan merchants with complete service capabilities such as product display, online transactions, and after-sales service. Kuaishou users will be able to directly use the Meituan Mini Program. We believe that this cooperation is expected to achieve a win-win situation. On the one hand, based on Kuaishou's rich content assets and trust economy, its broad traffic is expected to bring more efficient transformation to Meituan merchants; on the other hand, the supply of content, goods and services from Meituan merchants can enrich the Kuaishou platform ecosystem, meet the diverse needs of users, enhance stickiness, and bring more monetization possibilities to Kuaishou.
Develop an industrial belt and promote the steady development of Kuaishou e-commerce through a service provider system. The company said that Kuaishou e-commerce has completed the first stage of explosive growth and original accumulation, and entered the era of specialized, systematic and refined operation in 2021. On the basis of “building trust in e-commerce, developing brands, and expanding service providers” proposed earlier, Kuaishou will add a new development strategy of “expand the industrial belt” in 2022. At the same time, the company released Kuaishou E-commerce Service Provider System 2.0, which divides service providers into three levels of quality, core, and strategy. Each level includes MCN service providers, merchant service providers, industrial belt service providers and brand service providers. In the future, the Kuaishou e-commerce service provider system will focus on developing MCN, industrial belts, brands, and improving the infrastructure of traders, and continue to provide a standardized and definitive path for platform merchants.
Valuation and advice
We maintain our revenue and profit forecasts for 2021 and 2022. Maintaining an outperforming industry rating and a target price of HK$140 based on SOTP valuation, corresponding to 5.1x 202e P/S, there is room for 94% increase from the current stock price. Currently, the company is trading at 2.6x 202e P/S.
risks
Regulatory and content policy risks, user or commercial growth falling short of expectations, and higher costs or expenses than expected.