Huachuang Securities·2024-08-31 03:44Investment Rating - The report maintains a "Recommended" investment rating for Kuaishou-W (01024.HK) with a target price of HKD 62.12, compared to the current price of HKD 39.40 [2]. Core Views - The company reported a total revenue of RMB 30.975 billion for Q2 2024, representing a year-over-year increase of 11.6%. The gross margin improved to 55.3% from 50.2% in the same period last year, and net profit surged by 168.7% to RMB 3.980 billion [2]. - Kuaishou continues to enhance its operational strategies, focusing on high-quality user growth and maintaining a solid user base. Daily active users (DAU) reached 395 million, up 5.1% year-over-year, while monthly active users (MAU) reached 692 million, up 2.7% year-over-year [2]. - The company's advertising revenue for Q2 2024 was RMB 17.52 billion, a 22.1% increase year-over-year, driven by significant growth in external advertising, particularly in media, e-commerce, and local services [2]. - Kuaishou's e-commerce gross merchandise volume (GMV) reached RMB 305.3 billion, reflecting a 15% year-over-year increase, with active buyers growing by 14.1% to 131 million [2]. - The adjusted net profit for Q2 2024 was RMB 4.679 billion, marking a 73.7% increase year-over-year, with an adjusted net profit margin exceeding 15% [2]. - The company aims for a mid-term adjusted net profit margin target of 20%, supported by improved revenue structure and operational efficiency [2]. Financial Summary - Total revenue projections for 2024-2026 are adjusted to RMB 127.3 billion, RMB 142.6 billion, and RMB 156.4 billion, with year-over-year growth rates of 12.2%, 11.9%, and 9.7% respectively [2]. - The forecast for net profit attributable to shareholders is revised to RMB 17.6 billion, RMB 22.7 billion, and RMB 28.3 billion for the same period, with growth rates of 71.5%, 28.9%, and 24.8% respectively [2]. - The report employs a sum-of-the-parts (SOTP) valuation method, estimating a target market capitalization of HKD 270.4 billion for 2024 [2].