【行业研究报告】快手-W-More bullish on margin improvement

21Mar2024
CMBInternationalGlobalMarkets|EquityResearch|CompanyUpdate
Kuaishou(1024HK)
Morebullishonmarginimprovement
WeturnmorebullishonKuaishou’s(KS)marginenhancementahead,withads&
ecommercesharegainstocontinue.KSdeliveredsolid4Q23results,withinline
revenueandupbeatbottomline.ForFY24E,weexpecttotalrevenue+10.6%YoY,
withlivestreaming/ads/otherservicesrevenue-8%/+20%/+24%YoY.Thanksto
moreaggressivecostdisciplineandoperatingleverage,weexpectbottomlineat
RMB16bninFY24E(suggestingad.NPMat12.8%,+4pptsYoY).WeliftourFY24-
25Eearningsforecastby5%-18%,butmaintainSOTP-basedTPatHK$97
(implying24x/17xFY24/25EP/E).
4Q23beatonmargin.Asstatedinourpreviewreport,KSdeliveredanother
solid4Q23resultswithinlinerevenue(+15%YoY)andupbeatbottomline(at
solid4Q23resultswithinlinerevenue(+15%YoY)andupbeatbottomline(at
RMB4.4bn,34%aboveconsensus).Bysegment,livestreaming/ads/other
servicesrevenuewas+0%/21%/36%YoY,largelyinline.Adj.NPMimproved
QoQto13.4%in4Q23(vs.ourestimatesof10.7%),mainlyonahigher-than-
expectedGPMandnarrowinglossofoverseasbusiness.DAUtrendedwell,
up7%YoY.
Expectoutperformanceofadsandecommercein1Q24E.In1Q24E,we
expectKS’sadsrevenue+26%YoY(vs.prior+21%),onstronginternalads
anddouble-digitgrowthofexternalads;livestreamingrevenuemaydecline
8%YoY,forproactivebusinessadjustment.Weexpectecommerce’sstrong
momentumtocontinue,forecastingGMV+29%YoYandothersservices
revenue+40%YoY(aboveconsensus)in1Q24E.GPMwouldimprove6ppts
YoY,upto52.4%,byourestimates.DespiteamildincreaseinS&M,weexpect
1Q24EbottomlineatRMB3bn,surpassingconsensusby30%.
Bettermarginoutlookahead.ForFY24E,weexpecttotalrevenue+10.6%
YoY,withlivestreaming/ads/otherservicesrevenue-8%/+20%/+24%YoY.
EcommerceGMVcouldberesilientat+25%YoY,boostedbytheramp-upof
shelf-basedmall,categoryexpansionandimprovingMAC/MAU.Mgmt
restateditsGMVtargetofRMB2trnbyFY26E,suggestinga20%CAGRin
FY24-26E.TakeratemightbestableYoY.Coupledwithhealthyexternalads
recovery,weexpecttotaladsrevenue+20%YoYinFY24E.Adssegment
shouldbenefitfromrobustdemandfromsomeverticals(e.g.education,auto)
andenhancedadsefficiency.Onthemarginside,weexpectGPMat53%YoY
inFY24E,andS&Mexpenseratioataround31%.Assuch,weexpectbottom
lineatRMB16bninFY24E(suggestingad.NPMat12.8%,+4pptsYoY).
MaintainBUY.WeliftourFY24-25Eearningsforecastby5%-18%,but
maintainSOTP-basedTPatHK$97.Catalysts:1)asolid1Q24E;2)shelf-
basedmallexpansion;and3)earningsupside.