Zhi Tong Cai Jing·2025-07-30 09:16Core Viewpoint - The Hong Kong stock market experienced a collective decline, with Kuaishou showing resilience amidst pressure on the internet sector, leading to a positive outlook for its upcoming Q2 earnings report [1][2]. Group 1: Market Performance - On July 30, the Hang Seng Index fell by 0.43%, the Hang Seng China Enterprises Index also dropped by 0.43%, and the Hang Seng Tech Index decreased by 1.57% [1]. - Kuaishou's stock price reached a high of over 2% during the day, ultimately closing with a 0.42% increase at 72.4 HKD, with a trading volume of 2.91 billion HKD [1]. Group 2: Earnings Forecast - Kuaishou is expected to release its Q2 2025 earnings report in late August, with multiple institutions issuing bullish reports, anticipating that the Q2 performance will meet expectations [1]. - Citigroup forecasts Kuaishou's revenue to grow by 11% year-on-year to 34.5 billion RMB, with an adjusted net profit of approximately 5.1 billion RMB, aligning with market expectations [2]. Group 3: Growth Drivers - The positive outlook is attributed to two main factors: the commercialization of the video generation model, Kuaishou AI, which exceeded expectations, and the enhanced monetization capabilities of its shelf e-commerce advertising system [1][2]. - Kuaishou's monthly revenue surpassed 100 million RMB in April and May, indicating a strong performance that could significantly exceed the management's guidance of 100 million USD for the year [1]. - The advertising revenue growth rate is expected to accelerate to 12.3% in Q2, driven by increased advertising spending from e-commerce merchants and a recovery in non-e-commerce advertising demand [1][2]. Group 4: Valuation Adjustments - Citigroup has adjusted its valuation benchmark to 2026 earnings, raising the price-to-earnings ratio estimate from 13 times to 15 times [3].