KUAISHOU(01024) 交银国际证券·2024-07-18 01:31Investment Rating - The report maintains a "Buy" rating for the company, Kuaishou (1024 HK), with a target price adjusted to HKD 55.00, indicating a potential upside of 17.6% from the current closing price of HKD 46.75 [1][2][8]. Core Insights - The report anticipates a 10% year-on-year revenue growth for Q2 2024, projecting revenues of RMB 30.5 billion. Adjusted net profit is expected to increase by 63% year-on-year to RMB 4.4 billion, with an adjusted net profit margin of 14.4% [1]. - The e-commerce GMV growth forecast has been revised down to 19% for Q2 and 21% for the full year, primarily due to a slowdown in market growth and increased competition in the live-streaming e-commerce sector [1]. - Advertising revenue is expected to grow rapidly, driven by AI-enabled marketing products, with a projected year-on-year increase of 22% to RMB 17.5 billion in Q2 2024 [1]. Financial Overview - Revenue projections for the company are as follows: RMB 113.47 billion in 2023, RMB 127.70 billion in 2024, RMB 143.03 billion in 2025, and RMB 158.26 billion in 2026, reflecting a compound annual growth rate (CAGR) of approximately 10.7% [2][9]. - The adjusted net profit is forecasted to be RMB 10.27 billion in 2023, RMB 18.22 billion in 2024, RMB 22.62 billion in 2025, and RMB 27.49 billion in 2026, indicating a significant recovery from previous losses [2][9]. - The company’s gross margin is expected to improve, reaching 55% by 2024, with a gradual increase in operating profit margin projected to 19.5% by 2026 [9][10]. Market Position and Competitive Landscape - The report highlights that Kuaishou's daily active users (DAU) have remained stable, but growth has lagged behind competitors like Taobao and JD during promotional periods, indicating increased competition in the e-commerce space [1][4]. - The report notes that the advertising market remains robust, with continued investment from various sectors, including media and gaming, contributing to Kuaishou's advertising revenue growth [1][6].