The Zhitong Finance App learned that Lyon released a research report stating that it maintains the Kuaishou-W (01024) “buy” rating, and the target price is HK$83.
The bank expects that Kuaishou's first quarter results will be steady. Total revenue will increase 15% year over year to RMB 29 billion, and adjusted Ebit will reach RMB 3.6 billion, compared to only RMB 200 million in the same period last year. The e-commerce business remains the main engine of growth, and the bank is expected to maintain strong 29% year-over-year growth, leading to a 40% year-over-year increase in e-commerce advertising and commissions.
The report indicates that as skit ad inventory increases and the coverage of mini-games and offline advertisers expands, external advertising may also continue to grow in double digits. Domestic business Ebit may reach 3.9 billion yuan, with a profit margin of 14%, while overseas losses may shrink further to 400 million yuan. The bank expects Kuaishou's profit margin to increase 70% year over year.