Fitch assigns KUAISHOU-W an "A-" issuer default rating with a "stable" outlook

Fitch Ratings has assigned KUAISHOU-W (01024.HK) a long-term issuer default rating of "A-" in both foreign and local currencies, with a "stable" outlook. Fitch also granted the company an "A-" senior unsecured rating and assigned an "A-" rating to its proposed issuance of senior unsecured notes in US dollars and offshore renminbi.

The rating is based on Fitch's expectation that KUAISHOU will maintain a strong position in China's short video, live streaming, and content e-commerce service sectors. Its user engagement, content ecosystem, and differentiated market positioning will support business expansion. The company is expected to benefit from the continued increase in online advertising and marketing budgets allocated to short video platforms, as well as strong growth in content e-commerce. Additionally, the company's conservative capital structure and substantial net cash position also support its rating.

However, KUAISHOU's relatively short track record of achieving sustained profitability constrains its rating, especially considering the intense competition in China's rapidly evolving internet industry, where KUAISHOU faces stronger competitors in several business areas. Recent large-scale automated cyberattacks targeting KUAISHOU highlight the rising operational risks in an increasingly complex environment, as cyberattacks could pressure content security management and incident response capabilities. Although Fitch considers this to be an isolated incident and does not expect it to have a material impact on KUAISHOU's financials or operations, if such issues recur, they could undermine user confidence in the platform and trigger more stringent regulatory intervention.

The rating of the proposed notes is equivalent to KUAISHOU's issuer default rating, as the notes constitute the company's direct, unsecured, non-subordinated debt and rank equally with all other unsecured non-subordinated debt of the company. The proceeds will be used for general corporate purposes