Zhao Yin Guo Ji·2024-06-25 02:01Investment Rating - The report maintains a BUY rating for Kuaishou with an unchanged target price (TP) of HK$97 [2][4]. Core Insights - Kuaishou's shelf-based ecommerce performed strongly during the 618 promotion, with orders and paying users increasing by 65% and 57% year-on-year (YoY) respectively [2]. - The company is expected to achieve ecommerce growth of 25% YoY in GMV and 24% YoY in other services revenue for Q2 2024 [2]. - Kuaishou's self-developed video generation model, "Kling," was launched, showcasing advancements in AI technology [2]. Financial Performance - Revenue for FY22 was RMB 94,183 million, with a YoY growth of 16.2%, and is projected to reach RMB 125,544 million in FY24E, reflecting a growth of 10.6% [3][7]. - Adjusted net profit is expected to improve significantly from RMB 10,271 million in FY23A to RMB 17,247 million in FY24E, marking a growth of 67.9% [3][8]. - The diluted EPS is forecasted to increase from RMB 2.31 in FY23A to RMB 3.74 in FY24E, indicating a growth of 61.8% [3][8]. Market Position and Growth - Kuaishou's GMV share from pan shelf-based ecommerce is estimated to exceed 25%, indicating a strong market position [2]. - Active merchants grew by 26% YoY, with small and medium enterprises (SMEs) increasing by 28% YoY during the 618 promotion [2]. - The consumer electronics and furniture categories saw GMV surges of over 83% YoY, with brand pan shelf-based GMV increasing by over 177% YoY [2].