"Forecast" Securities expect KUAISHOU-W's adjusted net profit to rise by over 8% in the second quarter, focusing on e-commerce and sustainable strategy guidance (Update)

AASTOCKS
2025.08.20 07:27

KUAISHOU-W (01024.HK) will announce its second-quarter results for this year tomorrow (21st), benefiting from the growth in advertising and e-commerce revenue, as well as the monetization of the KuaLing AI model. According to a comprehensive forecast from 7 brokerages, Kuaishou's adjusted net profit for the second quarter is expected to be between RMB 5.039 billion and RMB 5.11 billion, compared to RMB 4.679 billion in the same period last year, representing a year-on-year increase of 7.7% to 9.2%, with a median of RMB 5.085 billion, an increase of 8.7% year-on-year.

Based on the forecasts from 7 brokerages, Kuaishou's revenue for the second quarter is expected to be between RMB 34.301 billion and RMB 34.66 billion, compared to RMB 30.975 billion in the same period last year, representing a year-on-year increase of 10.7% to 11.9%, with a median of RMB 34.511 billion, an increase of 11.4% year-on-year. Investors will focus on the latest operational and strategic guidance from Kuaishou's management, including plans for expanding direct e-commerce business and investment budgets, plans for expanding other new businesses (including delivery services), and attention to the KuaLing subscription user expansion plan.

【E-commerce GMV expected to record over 10% growth】

Citi expects Kuaishou's total revenue for the second quarter to grow by 11.2% year-on-year to RMB 34.5 billion, driven mainly by stable e-commerce GMV growth of 13.5% year-on-year to RMB 346 billion, as well as the global expansion momentum of KuaLing AI. The bank expects KuaLing AI's revenue for the second quarter to reach RMB 300 million, with growth exceeding expectations, becoming a new revenue growth engine. Currently, KuaLing AI has served 45 million creators globally, covering 149 countries/regions, generating over 200 million videos and 400 million images. Adoption by enterprises is also very strong, with over 20,000 companies integrating with developers through API, covering applications in advertising, film and television, gaming, and e-commerce. KuaLing AI has been widely used in film and television production, for example, Huace Film & Television utilizes it to generate short drama scenes, planning to achieve full-process AI-assisted production by the end of 2025, with KuaLing AI expected to contribute over RMB 10 billion in revenue within 10 years.

Bank of America expects KuaLing AI's revenue to grow from USD 140 million in 2025 to USD 410 million by 2027. In the long term, KuaLing AI has enormous growth potential, targeting the professional video creation market, which exceeds USD 100 billion. Kuaishou has a target price of HKD 92, valuing its KuaLing AI business at HKD 8 per share (total valuation of USD 5 billion), equivalent to a forecasted price-to-sales ratio of 16 times next year.

Citi predicts that Kuaishou's adjusted net profit for the second quarter will rise by 9% year-on-year to RMB 5.1 billion, with revenue increasing by 11% year-on-year to RMB 34.5 billion, of which advertising and other revenues are expected to rise by 12% and 20% year-on-year, and live streaming revenue is expected to rise by 6%, assuming that the gross transaction amount during the quarter increases by 14% year-on-year. The bank expects the company's quarterly gross margin to remain flat year-on-year at 55.3%, with the adjusted operating profit margin expected to rise by 1 percentage point year-on-year to 16%, benefiting from operational leverage The bank pointed out that the company's advertising revenue growth accelerated during the quarter, benefiting from a low base effect and increased monetization of shelf e-commerce. The bank expects the monetization situation of AI models to be promising.

Goldman Sachs expects KUAISHOU's adjusted net profit for the second quarter of this year to rise by 8.7% to RMB 5.085 billion, estimating revenue to increase by 11.5% year-on-year to RMB 34.301 billion. It is anticipated that live streaming revenue will increase by 5% year-on-year to RMB 9.786 billion, and online marketing service revenue is expected to rise by 12% year-on-year to RMB 19.568 billion (of which e-commerce related advertising revenue is expected to increase by 10% year-on-year to RMB 9.271 billion, and non-e-commerce related advertising revenue is expected to rise by 14% year-on-year to RMB 10.297 billion). The average daily active users are expected to reach 410 million (up 4% year-on-year), with the average daily usage time of KUAISHOU app users expected to be 127 minutes (122 minutes in the second quarter of 2024). The bank expects KUAISHOU's adjusted profit margin for the second quarter to be 14.8%.

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According to a comprehensive forecast from 7 brokerages, KUAISHOU's adjusted net profit for the second quarter of this year is expected to be between RMB 5.039 billion and RMB 5.11 billion, compared to RMB 4.679 billion in the same period last year, representing a year-on-year increase of 7.7% to 9.2%, with a median of RMB 5.085 billion, an increase of 8.7% year-on-year.

Brokerage│Adjusted net profit forecast for the second quarter (RMB)│Year-on-year change

Everbright Securities│RMB 5.11 billion│+9.2%

Citi│RMB 5.1 billion│+9.0%

Goldman Sachs│RMB 5.085 billion│+8.7%

Nomura│RMB 5.059 billion│+8.1%

Haitong International│RMB 5.052 billion│+8.0%

Bank of China International│RMB 5.039 billion│+7.7%

Based on the company's adjusted net profit of RMB 4.679 billion for the same period last year.

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According to the comprehensive forecast from 7 brokerages, KUAISHOU's revenue for the second quarter of this year is expected to be between RMB 34.301 billion and RMB 34.66 billion, compared to RMB 30.975 billion in the same period last year, representing a year-on-year increase of 10.7% to 11.9%, with a median of RMB 34.511 billion, an increase of 11.4% year-on-year.

Brokerage│Revenue forecast for the second quarter (RMB)│Year-on-year change

Haitong International│RMB 34.608 billion│+11.7%

Nomura│RMB 34.531 billion│+11.5%

Everbright Securities│RMB 34.53 billion│+11.5% Bank of China International │ CNY 34.511 billion │ +11.4%

Citigroup │ CNY 34.46 billion │ +11.3%

Citi │ CNY 34.458 billion │ +11.2%

Goldman Sachs │ CNY 34.301 billion │ +10.7%

Based on KUAISHOU-W's revenue of CNY 30.975 billion for the second quarter of 2024

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