20220722-招银国际-快手-W-01024.HK-Stronger_DAU_and_ecommerce_ahead_4页_862kb

Kuaishou (1024 HK) Company Update Summary

Core Content

CMB International Global Markets has released an updated equity research report on Kuaishou, highlighting its financial performance and future outlook for the second quarter of 2022 (2Q22E) and beyond. The report outlines expectations for key metrics such as daily active users (DAU), revenue, and net profit, while also providing insights into the company's business segments and financial ratios.

Main Points

2Q22E Financial Outlook

• Revenue Growth: Expected to grow by +8% YoY, largely in line with previous guidance.
• DAU Growth: Anticipated to increase by +18% YoY, surpassing the prior quarter's growth rate of +15%.
• Non-GAAP Net Loss: Estimated at RMB2.5bn, better than the consensus of RMB3.1bn.
• Non-GAAP NPM (Net Profit Margin): Improved QoQ to -12.2%.
• Ecommerce GMV: Forecasted to grow by +25% YoY, with strong momentum in July (>30% YoY) and early July acceleration.
• Ads Revenue: Expected to grow by +7% YoY, with internal ecommerce and brand ads performing well, while external ads declined YoY in June.
• Ads Forecast for 2H22E: Anticipated to reach +18% YoY, driven by algorithm optimization and vertical recovery.
• Live Streaming: Projected to grow by 11% YoY, supported by higher user engagement, despite regulatory adjustments.
• Adj. NPM: Expected to improve QoQ, with better gross margin and continuous operating expenses control.
• S&M Expenses: Declined QoQ.

Investment Recommendation

• Rating: Maintain BUY.
• Target Price (TP): HK$120 (unchanged from previous TP).
• Upside Potential: +45.6% from current price (HK$82.4).

Financial Summary

• Revenue Projections:
  • FY20A: RMB58,776 million
  • FY21A: RMB81,082 million
  • FY22E: RMB92,761 million
  • FY23E: RMB110,119 million
  • FY24E: RMB127,311 million
• Adj. Net Profit:
  • FY20A: RMB-7,863 million
  • FY21A: RMB-18,852 million
  • FY22E: RMB-9,504 million
  • FY23E: RMB-4,207 million
  • FY24E: RMB3,085 million
• P/S Ratio:
  • FY20A: 5.1
  • FY21A: 3.7
  • FY22E: 3.2
  • FY23E: 2.7
  • FY24E: 2.4

Key Ratios

• Sales Mix:
  • Live Streaming: 34.8% (FY22E), decreasing from 56.5% (FY20A).
  • Online Marketing Services: 54.6% (FY22E), increasing from 37.2% (FY20A).
  • Other Services: 10.7% (FY22E), increasing from 6.3% (FY20A).
• Gross Margin:
  • FY22E: 41.9%, slightly below the consensus of 43.7%.
• Operating Margin:
  • FY22E: -20.5%, improving from -24.1% (old estimate).
• Adj. Net Margin:
  • FY22E: -10.2%, improving from -13.3% (old estimate).

Key Information

• Company Highlights:

  • Strong DAU growth and ecommerce performance in 2Q22E.
  • Positive momentum in July with GMV acceleration.
  • Ads segment expected to rebound in 2H22E.
  • Domestic business is expected to break even in 4Q22E.

• Shareholding Structure:

  • Tencent: 20.7%
  • 5Y Capital: 16.0%
  • DCM LP: 7.9%

• Stock Data:

  • Market Cap: HK$338,670 million
  • 52-week High/Low: HK$150.3 / HK$53.15

• Share Performance:

  • 1-month: -3.0%
  • 3-month: +26.8%
  • 6-month: -5.6%

Related Reports

• Moving into 2H22 recovery (25 May 2022)
• Share gain continued, despite epidemic pressure (13 May 2022)
• Expecting a solid start in FY22E (30 Mar 2022)

Auditor & Disclosures

• Auditor: PwC
• Important Disclosures:
  • The report is not tailored to individual investors.
  • Past performance does not guarantee future results.
  • The information is based on publicly available data and not guaranteed.
  • CMBIGM may have conflicts of interest and is not liable for any reliance on the report.

Analyst Certification

• The analyst certifies that the views expressed accurately reflect their personal opinions.
• No compensation is directly or indirectly related to the views in the report.
• The analyst confirms no trading activity in the stock covered in the preceding 30 days and will not trade within 3 business days of the report's issue date.

CMBIGM Ratings

• BUY: Potential return of over 15% over next 12 months.
• HOLD: Potential return of +15% to -10% over next 12 months.
• SELL: Potential loss of over 10% over next 12 months.
• OUTPERFORM: Industry expected to outperform the relevant market benchmark.
• MARKET-PERFORM: Industry expected to perform in-line with the market.
• UNDERPERFORM: Industry expected to underperform the market.

Legal & Distribution Notes

• The report is for the use of intended recipients only.
• It may not be reproduced, reprinted, sold, or published without written consent.
• Distribution is subject to legal requirements in the UK, US, and Singapore.