【行业研究报告】快手-W-Solid 4Q22E with better margin outlook

WeexpectKuaishoutodeliverresilient4Q22E,withupbeatads&livestreaming
andbettermargin(overseasnarrowinglosstooffsetlowerGPMandhigherS&M).
RisingCOVIDcasesafterChinareopeningdampenedecommercetakerate(on
higherreturnswithlogisticsdisruptions),butGMVtrendremainedintact(also
supportinginternaladsperformance).Lookingahead,weseehighvisibilityfor
KStoembraceadsrecoveryfrom2Q23E,andgroupbreakevenisinsight.We
slightlyraisedFY22-24Erevby0.3-0.4%withhighermargin(+0.1ppts),toreflect
effectivecostcontrolinoverseasmarket.Coupledwithhighermultipleafter
sectorre-rating,weliftourSOTP-basedTPtoHK$94.
Expectingupbeat4Q22E.WeexpectKuaishoutodeliversolid4Q22E,
withrev+11%YoY(vs.prior+10%)andnarrowingnetlossatRMB247mn
withrev+11%YoY(vs.prior+10%)andnarrowingnetlossatRMB247mn
(vs.priorlossatRMB348mn).CostdisciplinewouldcontinueinFY23E,
backedbyalgorithmoptimizationandoverseascostcontrol.Usermetrics
trendswellin4Q22E,inwhichDAUkeptsequentialgrowthanddailytime
spentperDAUstableataround130mins.
Strongeradsandlivestreamingtooffsetepidemicimpacton
ecommerce.WearepositiveonKS’sadsrecovery,andforecastitsadsrev
+10%YoYin4Q22E(vs.prior+8%),boostedbyinternaladsacceleration
onecommercestrongseasonality.Externaladsmightnotresumepositive
growthin4Q22E,butweexpect2Q23Etoseerisingdemandpostreopening.
KSiswellpositionedtocapturerecoveringadsbudgets,andwill
continuouslygainsharewithcustomizedsolutionsandverticalpenetration
(e.g.FMCG,auto,finance).Giveneffectiveannualcampaignsoperation,we
estimatelivestreamingrev+7%YoYin4Q22E(vs.prior+5%).Ecommerce
GMVkeptontrack(forecasting+31%YoYin4Q22E),butrevgrowthmight
bedampenedbylowertakeratewithrisingreturnsfromepidemic
disruptions.Weforecastotherservicesrev+32%YoYin4Q22E.
Bettermarginoutlookwithnarrowingoverseasloss.Onthemarginside,
weexpectGPMat45.8%in4Q22E(atlow-endguidance,mainlyonhigher
livestreamingcampaignincentivesandcontentcost).S&Mmightseeslight
sequentialgrowthforpromotionsonearlyCNY(forecastingS&M/Revratio
toimprove3pptsQoQ).OverseaslosswouldnarrowQoQ(vs.previous
guidanceofstableQoQ).Assuch,weexpect4Q22Etoseebettermargin
outlook(forecastingadj.NPat-RMB247mn).
MaintainBUY.Tofactorinresilientgrowthandbettermargin,weslightly
raisedFY22-24Erevby0.3-0.4%,withhighermarginby+0.1ppts.Ournew
TPisHK$94,withhighermultipleassignedandFXchange.