20220330-招银国际-快手-W-01024.HK-Expecting_a_solid_start_in_FY22E_5页_867kb

Kuaishou (1024 HK) Company Update Summary

Core Content Overview

This document provides an equity research update on Kuaishou (1024 HK), focusing on its financial performance in 4Q21, expectations for 1Q22E, and overall outlook for FY22E and beyond. The report highlights the company's strong performance, growth prospects, and valuation metrics, while also outlining key financial figures and analyst recommendations.

Key Financial Performance in 4Q21

• Revenue: Increased by 35% YoY, 6% above consensus, driven by strong performance in ads and ecommerce.
• Non-GAAP Net Loss: Reduced to RMB3.6bn, better than the consensus of -RMB3.9bn.
• DAU (Daily Active Users): Grew by 19% YoY, 1% above consensus, indicating strong user engagement.
• Revenue: RMB24.43bn, with online marketing services contributing RMB13.236bn (up 56% YoY) and live streaming generating RMB8.827bn (up 12% YoY).
• Ecommerce GMV: Rose by 40% YoY, with Kwai Shop contributing 99% of total GMV in Dec 2021 and a repeat purchase rate increase of 5 ppts YoY.

Outlook for 1Q22E

• DAU/Revenue Growth: Expected to grow by 15% and 22% YoY, respectively, due to strong traffic seasonality and CNY & Olympics promotions.
• Ads Revenue: Projected to increase by 31% YoY, supported by rising ad load for non-e-commerce ads, brand expansion, and solid ecommerce ads.
• Ecommerce Momentum: Continued growth in GMV by 40% YoY, with rising take rate.
• Adj. OPM (Operating Margin): Estimated at -20%, reflecting lower S&M/rev ratio and improving GPM.

FY22E and FY23E Forecasts

• Revenue Growth: 21.6% YoY in FY22E and 19.9% YoY in FY23E.
• Adj. Net Profit: Expected to narrow loss in FY22E to -RMB14.509bn, and turn positive in FY23E at RMB6.804bn.
• Adj. Net Margin: Projected to improve from -14.7% in FY22E to -5.8% in FY23E, with a positive margin in FY24E at 0.6%.
• Gross Margin: Projected to rise from 43.3% in FY22E to 50.0% in FY24E.
• Operating Margin: Expected to improve from -19.9% in FY22E to -3.6% in FY24E.

Valuation and Target Price

• Valuation: Based on 2.7x FY22E P/S, considered attractive.
• Target Price (TP): Maintained at HK$136, reflecting SOTP (Sum of the Parts) valuation.
• Current Price: HK$78.5, with a potential upside of +73.2% to the TP.

Analyst Recommendations

• Rating: BUY.
• Reasoning: Improved revenue forecasts by 3-3% for FY22-23E, and margin improvement by 0-4ppts, reflecting better cost control and operational efficiency.

Shareholding and Stock Data

• Market Cap: HK$320,339 million.
• Average 3-Month Turnover: HK$2,179.2 million.
• 52-Week High/Low: HK$287.8 / HK$54.7.
• Total Issued Shares: 3,494 million.
• Top Holders:
  • Tencent: 20.9%
  • 5Y Capital: 16.1%
  • Morningside: 10.8%

Share Performance

• 1-Month: -18.3% (Absolute) vs -13.2% (Relative).
• 3-Month: -6.4% (Absolute) vs +1.6% (Relative).
• 6-Month: -13.1% (Absolute) vs -1.7% (Relative).

Financial Summary

• Revenue: Expected to grow from RMB58,776 million (FY20A) to RMB137,795 million (FY24E).
• Adj. Net Profit: Transition from -RMB14,509 million (FY22E) to RMB884 million (FY24E).
• Adj. EPS (RMB): Projected to decrease from -RMB3.28 (FY22E) to RMB0.20 (FY24E).
• Operating Margin: Projected to improve from -19.9% (FY22E) to -3.6% (FY24E).

Key Ratios

• Sales Mix:
  • Live Streaming: 32.7% (FY22E).
  • Online Marketing Services: 57.1% (FY22E).
  • Other Services: 10.3% (FY22E).
• Adj. Net Margin: Improved from -14.7% (FY22E) to 0.6% (FY24E).
• ROE: Expected to decline from 12.4% (FY22E) to 2.5% (FY24E).

CMB International Global Markets Limited

• Ratings:
  • BUY: Potential return of >15% over 12 months.
  • HOLD: Potential return of +15% to -10%.
  • SELL: Potential loss of >10%.
  • NOT RATED: Not rated.
  • OUTPERFORM: Industry expected to outperform the market.
  • MARKET-PERFORM: Industry expected to perform in line with the market.
  • UNDERPERFORM: Industry expected to underperform the market.

Important Disclosures

• The report is not individually tailored and is not an offer or solicitation to buy/sell any security.
• CMBIGM does not guarantee accuracy or completeness of the information.
• Conflicts of interest may exist due to investment banking relationships.
• Legal disclaimer: CMBIGM is not liable for any loss or damage resulting from reliance on the report.