KUAISHOU(01024)2024-08-20 08:30Financial Performance - Revenue for Q2 2024 reached RMB 30,975 million, a YoY increase of 11.6%[2] - Gross profit for Q2 2024 was RMB 17,135 million, with a gross margin of 55.3%, up from 50.2% in Q2 2023[2] - Operating profit for Q2 2024 surged to RMB 3,906 million, a YoY increase of 201.4%[2] - Adjusted net profit for Q2 2024 was RMB 4,679 million, up 73.7% YoY[2] - Revenue for H1 2024 totaled RMB 60,383 million, a YoY increase of 14.0%[3] - Operating profit for H1 2024 was RMB 7,900 million, a significant YoY increase of 1,221.1%[3] - Adjusted EBITDA for H1 2024 was RMB 12,323 million, up 95.2% YoY[3] - Total revenue in Q2 2024 increased by 11.6% YoY to RMB 31 billion, with a gross margin exceeding 55% and adjusted net profit reaching RMB 4.7 billion, representing an adjusted net profit margin of 15.1%[8] - Revenue for the first half of 2024 was RMB 60.4 billion, up from RMB 53.0 billion in the same period of 2023[57] - Gross profit for the first half of 2024 increased to RMB 33.3 billion from RMB 25.6 billion in the first half of 2023[57] - Net profit attributable to equity holders for the first half of 2024 was RMB 8.1 billion, compared to RMB 605 million in the first half of 2023[57] - Total revenue for the six months ended June 30, 2024, reached RMB 60,383 million, a 14% increase compared to RMB 52,961 million in the same period of 2023[66] - Domestic operating profit for the six months ended June 30, 2024, was RMB 8,489 million, a significant increase from RMB 3,997 million in the same period of 2023[66] - Overseas operating loss for the six months ended June 30, 2024, improved to RMB 545 million, compared to a loss of RMB 1,603 million in the same period of 2023[66] - Online marketing services revenue for the six months ended June 30, 2024, increased by 25% to RMB 34,165 million, compared to RMB 27,411 million in the same period of 2023[67] - Revenue from other services for the six months ended June 30, 2024, grew by 33% to RMB 8,341 million, compared to RMB 6,263 million in the same period of 2023[67] - Basic earnings per share for the six months ended June 30, 2024, were RMB 1.87, a significant increase from RMB 0.14 in the same period of 2023[71] User Metrics - Average daily active users (DAUs) reached 395.3 million in Q2 2024, up from 376.0 million in Q2 2023[7] - Average monthly active users (MAUs) reached 694.6 million in H1 2024, up from 663.9 million in H1 2023[7] - Average daily active users (DAU) and monthly active users (MAU) of the Kuaishou app reached 395 million and 692 million in Q2 2024, growing by 5.1% and 2.7% YoY respectively, with daily usage time per DAU reaching 122 minutes[9] - Monthly Active Users (MAU) are calculated as the number of unique user accounts (excluding fraudulent accounts) that access the application at least once per calendar month[91] - Key definitions include "Daily Active Users" (DAU), referring to unique user accounts accessing the app at least once daily, excluding fraudulent accounts[90] E-commerce Performance - E-commerce GMV for Q2 2024 was RMB 305,253.4 million, a YoY increase of 15.0%[7] - E-commerce GMV in Q2 2024 increased by 15% YoY to RMB 305.3 billion, with monthly active buyers growing by 14.1% YoY to 131 million and penetration rate reaching a record high of 18.9%[12] - E-commerce GMV for consumer electronics and home brands increased by over 83% YoY during the 618 shopping festival[13] - General shelf e-commerce GMV accounted for over 25% of total GMV in Q2 2024, with order volume growing 65% YoY during 618[13] - Search e-commerce GMV surged over 80% YoY in Q2 2024, driven by improved user intent recognition through AI models[13] - Short video e-commerce GMV grew nearly 70% YoY in Q2 2024, enhancing synergy between short videos and live streaming[13] - GMV (Gross Merchandise Volume) refers to the total value of all products and services transacted on the company's platform or redirected to partner platforms, excluding single transactions over RMB 100,000 or a series of transactions by a single buyer exceeding RMB 1,000,000 in a single day, unless settled[91] AI and Technology - The company's AI matrix, including large language models and visual generation models, has been integrated into multiple business scenarios, with AIGC marketing material consumption peaking at RMB 20 million per day in Q2 2024[8] - The company launched the video generation model "Keling AI" for global testing and open-sourced its text-to-image AI model "Ketutu" to foster a collaborative ecosystem[8] Marketing and Advertising - Online marketing service revenue grew by 22.1% YoY to RMB 17.5 billion in Q2 2024, driven by optimized smart marketing solutions and increased client bidding[10] - Paid short drama marketing consumption in Q2 2024 grew by over 2x YoY, driven by improved user experience and intelligent subsidies[10] - The company's Universal Auto X (UAX) product accounted for over 30% of total external marketing consumption in Q2 2024, with penetration increasing across industries[10] - Online marketing service revenue increased 22.1% YoY to RMB 17.5 billion in Q2 2024, fueled by optimized smart marketing solutions[20] - Online marketing service revenue grew by 5.2% from RMB 16.7 billion in Q1 2024 to RMB 17.5 billion in Q2 2024, due to optimized intelligent marketing solutions[36] - Promotion and marketing expenses for the six months ended June 30, 2024, increased by 13% to RMB 18,204 million, compared to RMB 16,053 million in the same period of 2023[68] Overseas Operations - Overseas revenue reached RMB 1.1 billion in Q2 2024, a 141.4% YoY increase, with online marketing revenue growing over 200% YoY[15] - Overseas operating loss narrowed by 64.5% YoY to RMB 277 million in Q2 2024, reflecting improved monetization efficiency[15] - Overseas operating loss narrowed by 64.5% YoY from RMB 780 million in Q2 2023 to RMB 277 million in Q2 2024, due to rapid growth in overseas revenue[31] - Overseas revenue for the three months ended June 30, 2024, was RMB 1,079 million, compared to RMB 447 million for the same period in 2023[65] Live Streaming - Live streaming revenue declined 6.7% YoY to RMB 9.3 billion in Q2 2024, despite a 50% YoY increase in signed agencies[14] - Live streaming revenue increased by 8.5% from RMB 8.6 billion in Q1 2024 to RMB 9.3 billion in Q2 2024, attributed to refined operational strategies[36] Costs and Expenses - Sales and marketing expenses rose by 16.3% YoY from RMB 8.6 billion in Q2 2023 to RMB 10.0 billion in Q2 2024, accounting for 32.4% of total revenue[25] - R&D expenses decreased by 11.1% YoY from RMB 3.2 billion in Q2 2023 to RMB 2.8 billion in Q2 2024, primarily due to reduced employee benefits[27] - Sales cost increased by 4.2% from RMB 13.3 billion in Q1 2024 to RMB 13.8 billion in Q2 2024, primarily due to higher revenue sharing costs and related taxes[39] - Sales and marketing expenses increased by 7.0% from RMB 9.4 billion in Q1 2024 to RMB 10.0 billion in Q2 2024, accounting for 32.4% of total revenue[41] - Administrative expenses surged by 71.4% from RMB 462 million in Q1 2024 to RMB 792 million in Q2 2024, mainly due to higher employee benefits[42] - R&D expenses remained stable at RMB 2.8 billion in both Q1 and Q2 2024[43] - Employee benefits expenses for the six months ended June 30, 2024, decreased by 12% to RMB 8,063 million, compared to RMB 9,135 million in the same period of 2023[68] Cash Flow and Financial Position - Cash and cash equivalents as of June 30, 2024, stood at RMB 11.4 billion, up from RMB 11.0 billion as of March 31, 2024[52] - Total available funds, including cash equivalents, time deposits, and financial assets, amounted to RMB 77.7 billion as of June 30, 2024, compared to RMB 63.7 billion as of March 31, 2024[52] - Net cash generated from operating activities in Q2 2024 was RMB 7.6 billion, driven by pre-tax profit of RMB 4.0 billion and adjustments for non-cash items[54] - Net cash used in investing activities in Q2 2024 was RMB 13.8 billion, primarily due to investments in financial assets and time deposits[55] - Net cash generated from financing activities in Q2 2024 was RMB 6.7 billion, mainly from borrowings and notes issuance[56] - Net cash from operating activities was RMB 13,404 million for the six months ended June 30, 2024, compared to RMB 5,486 million for the same period in 2023[61] - Total assets increased to RMB 119,799 million as of June 30, 2024, compared to RMB 106,296 million as of December 31, 2023[59] - Non-current assets grew to RMB 55,798 million as of June 30, 2024, up from RMB 45,935 million as of December 31, 2023[59] - Current assets rose to RMB 64,001 million as of June 30, 2024, compared to RMB 60,361 million as of December 31, 2023[59] - Total equity increased to RMB 56,438 million as of June 30, 2024, from RMB 49,074 million as of December 31, 2023[60] - Total liabilities grew to RMB 63,361 million as of June 30, 2024, up from RMB 57,222 million as of December 31, 2023[60] - Total investments as of June 30, 2024, amounted to RMB 45,863 million, a 45% increase from RMB 31,606 million as of December 31, 2023[74] - Trade receivables increased to RMB 6,693 million as of June 30, 2024, compared to RMB 6,595 million as of December 31, 2023, with a credit loss provision of RMB 167 million[75] - Unsecured bank loans amounted to RMB 4,500 million with a floating interest rate averaging 3.47% annually as of June 30, 2024[77] - Accounts payable totaled RMB 24,897 million as of June 30, 2024, with 63.1% aged within three months[78] - The company secured an unsecured credit facility of RMB 9,000 million in June 2024, with RMB 4,500 million drawn by June 30, 2024, and an additional RMB 4,500 million drawn in July 2024[79] - Global offering net proceeds of HKD 46,964.4 million were allocated, with HKD 4,482.6 million used as of June 30, 2024, and HKD 8,150.3 million remaining[80][81] Corporate Governance and Compliance - The company has adopted the Corporate Governance Code and complied with all applicable code provisions except for the deviation from Code Provision C.2.1, where the Chairman and CEO roles are combined[85] - No interim dividend declared for the six months ended June 30, 2024[86] - The Audit Committee reviewed the unaudited interim financial information for the three and six months ended June 30, 2024, and discussed accounting principles, risk management, and internal controls[86] - The unaudited interim financial information for the three and six months ended June 30, 2024, was prepared in accordance with International Financial Reporting Standards (IFRS)[86] - No significant events affecting the group occurred after June 30, 2024, up to the date of the announcement[87] - The interim results announcement and interim report are available on the Hong Kong Stock Exchange and the company's website[87] - The company's Board includes executive directors Cheng Yixiao and Su Hua, non-executive directors Li Zhaohui, Zhang Fei, Lin Xinhe, and Wang Huiwen, and independent non-executive directors Huang Xuande, Ma Yin, and Professor Xiao Xing[89] - The company emphasizes forward-looking statements in the announcement, highlighting risks and uncertainties that may affect future performance[89] - The company adheres to the "Standard Code" for securities transactions by directors as outlined in Appendix C3 of the Listing Rules[92] - The company's Articles of Association include provisions for voting rights, appointment of independent non-executive directors, and other key governance matters[92] - The company's IPO prospectus was dated January 26, 2021, and outlines its initial public offering details[92] Merchant and Platform Growth - The number of active merchants in Q2 2024 grew by over 50% YoY, supported by initiatives like the "Qihang Plan" and "Fuyao Plan" to help new and small merchants scale their operations[12] - Daily active merchants on the platform increased by over 50% YoY, while daily buyers grew by over 70% YoY in Q2 2024[13] Events and Initiatives - The "Kuaishou Village Olympics" event attracted over 135,000 on-site attendees and 520 million online viewers, with total exposure exceeding 6.4 billion[9] - The company launched the "Kwai Concept Edition" in November 2018 to explore different user needs and preferences[91] - The "Kwai Lite" version was officially launched in August 2019 as an alternative to the main Kwai app[91] - The main Kwai app, derived from the original mobile application "GIF Kwai" launched in 2011, continues to be a core product[91] - The company's organizational outline, effective from June 13, 2024, governs its operations and structure[91] Share Repurchases and Capital Allocation - The company repurchased 52,561,400 B-class shares for a total consideration of HKD 2,434,480,144.74 from January to August 2024[83][84] - No repurchase, sale, or redemption of any listed securities by the company or its subsidiaries during the six months ended June 30, 2024[85]