快手-W：2季度利润超预期，电商GMV增速放缓

Investment Rating - The report assigns a "Buy" rating for the company Kuaishou (1024 HK) with a target price of HKD 54.00, indicating a potential upside of 21.6% from the current price of HKD 44.40 [1][18]. Core Insights - Kuaishou's Q2 2024 profits exceeded expectations, with total revenue reaching RMB 31 billion, a year-on-year increase of 12%, slightly above market expectations due to a smaller-than-expected decline in live streaming revenue [2]. - The gross margin improved to 55.3%, up 5.1 percentage points year-on-year, driven by better cost control and an increase in advertising and e-commerce revenue [2]. - The adjusted net profit for Q2 was RMB 4.7 billion, representing a year-on-year increase of 74%, outperforming both the report's and market's expectations [2]. Financial Overview - Revenue projections for the upcoming years are as follows: RMB 126.97 billion in 2024, RMB 140.03 billion in 2025, and RMB 151.8 billion in 2026, with respective growth rates of 11.9%, 10.3%, and 8.4% [3][19]. - The adjusted net profit is expected to reach RMB 18.01 billion in 2024, RMB 22.03 billion in 2025, and RMB 26.42 billion in 2026, with significant growth rates of 77.2%, 23.3%, and 21.1% respectively [3][19]. - The report anticipates a compound annual growth rate (CAGR) of 21% for profits from 2024 to 2026, indicating a favorable long-term outlook [2]. Business Segment Performance - E-commerce GMV (Gross Merchandise Volume) grew by 15% year-on-year, although this was below the expected 19%, primarily due to the impact of top streamers' inactivity and competition [2]. - Online marketing revenue increased by 22%, driven by accelerated growth in external advertising revenue, benefiting from increased spending on paid short dramas and local businesses [2]. - Live streaming revenue saw a slight decline of 7% year-on-year, which was better than expected due to improved operational efficiency [2]. Valuation - The report has adjusted the target price to HKD 54, based on a 10x P/E ratio for 2025, reflecting a slight decrease from the previous target of HKD 55 [2]. - The current price corresponds to an 8.1x P/E ratio for 2025, indicating that the stock is undervalued relative to its growth potential [2].