KUAISHOU(01024) 东吴证券·2024-05-26 16:01Investment Rating - The report maintains a "Buy" rating for Kuaishou-W (01024 HK) [1] Core Views - Kuaishou's Q1 2024 performance exceeded expectations with revenue of 29 408 billion yuan up 16 6% YoY beating Bloomberg consensus estimates [2] - Adjusted net profit reached 4 39 billion yuan surpassing the consensus estimate of 3 2 billion yuan [2] - The company announced a new share repurchase plan effective from June 13 2024 aiming to repurchase up to 16 billion HKD worth of Class B ordinary shares over the next three years [2] Financial Performance - Q1 2024 revenue grew 16 6% YoY to 29 408 billion yuan with gross margin at 55% higher than the consensus estimate of 52% [2] - Adjusted net profit increased slightly QoQ to 4 388 billion yuan in Q1 2024 despite it being a traditionally low season [3] - Cost optimization efforts led to a 4 percentage point YoY decrease in host sharing costs and related taxes as a percentage of revenue and a 2 percentage point YoY decrease in bandwidth and server hosting costs as a percentage of revenue [3] - Sales expense ratio R&D expense ratio and administrative expense ratio decreased by 2 68 1 91 and 2 07 percentage points YoY respectively [3] User Growth and Engagement - DAU reached 394 million in Q1 2024 up 5 2% YoY while MAU reached 697 million up 6 6% YoY [3] - DAU MAU ratio increased to 56 5% indicating strong user stickiness [3] - Average daily time spent per DAU increased by 2% YoY to 129 5 minutes [3] - Monthly active users using Kuaishou search grew over 15% YoY with peak daily search queries nearing 800 million [3] E-commerce and Monetization - Live streaming revenue decreased 8% YoY to 8 6 billion yuan in Q1 2024 with a projected 14% YoY decline in Q2 2024 [3] - Online marketing services revenue grew 27% YoY to 16 7 billion yuan driven by internal loop revenue growth and external loop advertising in sectors like media gaming and education [3] - Other revenue including e-commerce grew 48% YoY to 4 2 billion yuan [3] - GMV for e-commerce increased 28 2% YoY to 288 1 billion yuan in Q1 2024 with monthly active buyers reaching 126 million up 22 4% YoY [3] - The general shelf field contributed approximately 25% of total GMV with daily active sellers and buyers growing over 50% and 60% YoY respectively [3] Financial Forecasts - Revenue is projected to grow from 113 525 billion yuan in 2023A to 158 203 billion yuan in 2026E with a CAGR of 11 49% to 11 62% [2] - Net profit attributable to shareholders is expected to increase from 6 396 billion yuan in 2023A to 28 614 billion yuan in 2026E [2] - Non-GAAP net profit is forecasted to rise from 10 271 billion yuan in 2023A to 31 612 billion yuan in 2026E [2] - EPS is projected to grow from 1 47 yuan in 2023A to 6 59 yuan in 2026E [2] - The 2024-2026 adjusted PE ratios are estimated at 13x 9x and 7x respectively [4] Valuation and Market Data - The stock's closing price was 56 65 HKD with a 52-week range of 38 40 to 72 50 HKD [5] - The P B ratio stands at 4 71x [5] - The market capitalization is 203 032 billion HKD [5] - The company's net asset per share is 12 04 yuan with a debt-to-asset ratio of 50 53% [6]