Tianfeng Securities released a research report saying that considering that KUAISHOU-W (01024) external circulation advertising growth rate exceeded expectations, the company's revenue for 2024-2025 is estimated to be 127.1/140.7 billion yuan, respectively; the bank expects the company's adjusted net profit for 2024-2025 to be 17.6/21.6 billion yuan, respectively, maintaining a “buy” rating. In 2024Q3, the company achieved operating income of 31.1 billion yuan, adjusted net profit of 3.9 billion yuan, and gross profit of 16.9 billion yuan. The bank believes that the company's core business revenue is growing steadily, and suggests continuing to monitor changes in the company's profit margin.

The main views of Tianfeng Securities are as follows:

Traffic side: User traffic reached a record high, and DAU and time length both increased slightly year-on-year

The average DAU/MAU for Kuaishou applications in 2024Q3 was 0.408 billion/0.714 billion, up 5.4%/4.3% year on year, and DAU reached a record high; the average daily usage time of each DAU was 132.2 minutes, up 7.3% year on year. Looking forward to the future, the bank believes that the company's single user acquisition and retention costs will be further optimized, and user acquisition ROI is expected to increase further.

Online marketing business: Strong growth in external circulation advertising, steady growth in internal circulation advertising

2024Q3, online marketing service revenue reached 17.6 billion yuan, up 20% year on year, and its growth was mainly driven by the company's external circulation advertising; from an external circulation perspective, marketing consumption in industries such as media information, platform e-commerce, and local lifestyle increased significantly, and the proportion of UAX consumption in the external circulation further increased to about 50%; from an internal circulation perspective, the number of active marketing merchants in 24Q3 increased by more than 50% year on year; looking ahead to Q4, the bank expects the company's external circulation advertising to maintain a strong growth trend, and internal circulation advertising is still expected to synchronize with GMV's growth rate.

Revenue from other services (including e-commerce): GMV is affected by seasonal factors, and pan-shelf GMV is expected to increase steadily

2024Q3, the company's revenue from other services increased 17.5% year over year to 4.2 billion yuan, and Kuaishou e-commerce GMV increased 15.1% year over year to reach RMB 334.2 billion. On the supply side, the average monthly number of Kuaishou e-commerce merchants increased by more than 40% year on year in 2024Q3, with the number of new merchants entering Kuaishou increased by more than 30% year on year. This is mainly due to the company's continuous promotion of new merchant strategies such as the “Doujin Plan”, “Sailing Plan” and “Travel Assistance Plan”; on the demand side, the number of monthly active buyers of Kuaishou e-commerce increased 12.2% year on year to 0.133 billion yuan in 2024Q3. This is due to the company's design of diversified marketing methods around the growth stage of new users; looking ahead to Q4, this is due to the company's diversified marketing gameplay around the growth stage of new users. With the company's store The scenario gradually progresses, and the share of pan-shelf GMV continues to grow in large markets (2024Q3

(GMV accounts for more than 27%), and the year-on-year GMV growth rate is expected to reach 18% for the whole year.

Live streaming rewards business: The number of signed associations and anchors has been growing steadily, and new products are progressing well

By the end of the third quarter, the number of associations signed up to the platform had increased 40% year over year, and the number of signed anchors increased 60% year over year; under the “live streaming +” ecosystem, the average daily resume delivery volume of the “quick hire” business had nearly doubled year over year, and the scale of two-way matching increased by more than 20% year on year; looking forward to the future, the bank believes that the company can meet user needs in different scenarios and further optimize the live streaming ecosystem through rich product forms (quick hire, ideal home, etc.).

Overseas business: ROI drives growth and pursues commercialization in core regions

In 2024Q3, the year-on-year increase was 104.1% to 1.33 billion yuan. Among them, the overseas business achieved breakthroughs in user growth, customer acquisition channel innovation, and user process optimization, including a 9.7% year-on-year increase in daily active users (DAU) in Brazil, and a 4.2% year-on-year increase in the average daily usage time of DAU in a single day. The bank believes that based on the company's overseas ROI-driven growth model, the company will invest key resources in key countries where users are concentrated, the ecology is more mature, and commercial monetization can be initiated.