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Kuaishou Technology is about to release 4Q21 financial results. We expect revenue of 23.08 billion yuan in the fourth quarter, which is + 28% year-on-year and + 13% month-on-month. The adjusted net loss is expected to be 3.76 billion yuan, and the adjusted net loss rate is-16.3%. The month-on-month loss is expected to be 7.2 pct lower, and the month-on-month loss is expected to be 1.06 billion lower. In terms of operational data, the 4Q21 DAU is expected to be 320 million, which is unchanged from the previous month; the sales rate is 47%, a decrease of 6.8pct from the previous month. Kuaishou Technology is expected to improve the core indicators: sales rates continue to improve, operating data performance is stable.

Valuations are low and confidence is expected to continue to be boosted if core indicators continue to improve in the coming quarters. We maintain our profit forecast, maintain our target price of HK $155-164, and continue to maintain our "buy" rating.

Risk hint

Policy and regulatory risks, the risk of deterioration of the competition pattern of short videos, the risk of raising sales rates, the risk of game between different businesses in business development, the risk of valuation, the risk of profit forecast, and so on.