2024-09-17 04:11Investment Rating - The report maintains a "Buy" rating for Kuaishou (1024 HK) with a target price of HKD 54, indicating a potential upside of 41.5% from the current price of HKD 38.15 [2][3]. Core Insights - Kuaishou's management shared strategies focusing on AI empowerment to enhance ecosystem optimization and monetization capabilities during the 2024 Investor Day [1]. - The report emphasizes the importance of e-commerce and advertising commercialization, alongside AI development, as key areas for investor attention [1]. Summary by Sections Community Ecosystem and User Engagement - Kuaishou aims to maintain differentiated content supply, enhancing user interaction and participation, with a 28.8% year-on-year increase in comment duration and a 40% increase in private message interactions in Q2 [1]. - AI is being utilized to improve content recognition and understanding, increasing the proportion of high-quality content and enhancing monetization potential [1]. E-commerce - The report notes a downward trend in industry average prices, with Kuaishou focusing on content and supply enhancement to improve purchase conversion rates [1]. - Key metrics include an 18% year-on-year increase in live broadcast GPM (Gross Merchandise Volume per thousand views) and a 50% increase in short video GMV [1]. - The number of active merchants and users increased by 60% and 55% year-on-year, respectively, with a 30% increase in active products in Q2 [1]. Advertising - Kuaishou is enhancing monetization rates through AI-driven product capability iterations, with a 25 percentage point year-on-year increase in overall promotion customer penetration [1]. - The report highlights a 300%+ year-on-year increase in paid short drama consumption, leveraging a user base of 300 million daily active users and 40 million paying users [1]. Local Life Services - The company is targeting lower-tier markets, achieving a 278% year-on-year increase in monthly transaction users in Q2, while the number of active merchants grew approximately fivefold [1]. International Expansion - Kuaishou is focusing on commercializing in core countries, with Brazil showing stable growth and potential profitability by 2025, primarily through advertising [1]. Financial Projections - The report projects a 17% growth in e-commerce GMV and a 21% growth in advertising revenue for 2024, with an adjusted net profit expectation of RMB 18 billion [1].