20220513-招银国际-快手-W-01024.HK-Share_gain_continued,_despite_epidemic_pressure_4页_850kb

Kuaishou (1024 HK) Company Update Summary

Core Content

This report provides an update on Kuaishou's financial performance and outlook, highlighting its resilience in the face of the ongoing epidemic. The analysis includes revenue and profit forecasts, share price performance, and market positioning within the China internet sector.

Key Financial Forecasts

1Q22E Performance

• Revenue: Expected to grow by +21% YoY, in line with guidance.
• DAU: Projected to increase by +15% YoY.
• Adj. Net Loss: RMB -4.0bn.
• Ads Revenue: Expected to rise by +32% YoY, driven by non-e-commerce ads and brand expansion.
• Ecommerce GMV: Forecasted to grow by +40% YoY.

2Q22E Outlook

• Revenue Growth: Expected to slow to +10% YoY due to epidemic resurgence.
• Ecommerce GMV: Projected to grow by +20% YoY, still outperforming peers.
• Ads Revenue: Estimated to grow by +16% YoY, affected by logistics and macroeconomic challenges.
• Adj. NPM: Forecasted at -19% for 1Q22E, and -13% for FY22E.
• GPM: Expected to increase by +1 ppt YoY in FY22E.

FY22-24E Forecasts

• Revenue Growth: Trimmed by 4.7% - 5.5% to reflect epidemic impact.
• Adj. Net Profit: Projected to narrow from negative to positive in FY24E.
• P/S Ratio: Valuation at 2.3x FY22E P/S is considered attractive.

Share Price and Performance

• Current Price: HK$62.5
• Target Price (TP): HK$120 (revised from HK$136)
• 12-Month Price Performance: Stronger than the market, with a +92% upside.
• Share Performance:
  • 1-Month: -14.4%
  • 3-Month: -36.5%
  • 6-Month: -34.7%

Market Position and Ownership

• Market Cap: HK$248,946 million
• Shareholding Structure:
  • Tencent: 20.8%
  • 5Y Capital: 16.1%
  • DCM LP: 7.9%

Key Ratios

• Gross Margin: Expected to improve from 43.1% in FY22E to 50.0% in FY24E.
• Adj. Net Margin: Projected to narrow from -13.3% in FY22E to 1.8% in FY24E.
• Operating Margin: Expected to improve from -24.1% in FY22E to -5.1% in FY24E.

Analyst Recommendations

• Maintain BUY rating.
• Target Price: HK$120, reflecting the adjusted revenue and profit expectations.

Risk and Disclaimer

• The report highlights potential risks associated with investing in securities and emphasizes that it is not tailored investment advice.
• CMBIGM does not guarantee the accuracy or completeness of the information provided.
• The report is intended for use by its clients and may not be reproduced or distributed without prior consent.
• CMBIGM may have investment banking relationships with the companies mentioned, which could affect the objectivity of the report.

Conclusion

Despite short-term challenges from the epidemic, Kuaishou is expected to show resilience in its growth and margin improvement. The company's strong performance in ads and ecommerce is anticipated to rebound in the second half of 2022 as lockdowns ease. The revised target price and attractive valuation suggest a positive long-term outlook.