Kuaishou Technology (1024 HK)
Recommendation: BUY
Share Price: HK$38.15
Target Price: HK$70.00
Upside: +83.5%
Kuaishou presented a clear strategy for future growth at its 2024 Investor Day, focusing on e-commerce, AI-generated content (AIGC), and international expansion:
- User Engagement: Kuaishou plans to maintain a strong user base, targeting 400 million daily active users (DAU) and 700 million monthly active users (MAU) by year-end. Investments in AI tools, particularly the Kling AI platform, have enhanced content creation and recognition, boosting user engagement.
- E-Commerce: Gross merchandise value (GMV) grew by 21% year-on-year in 1H24, though average order value fell by 23%. Kuaishou aims to further integrate live-streaming and AI-driven advertising to bolster its e-commerce business.
- International Expansion: Kuaishou’s international business saw a 164% year-on-year increase in revenue, focusing on Brazil and Indonesia. The company expects to break even in these markets by the end of 2025.
- AI-Generated Content (AIGC): Kuaishou’s Kling AI platform, which has undergone nine upgrades, has generated over 53 million images and 27 million videos. The platform is driving growth in AI-generated content, enhancing Kuaishou’s overall ecosystem.
- Valuation/Recommendation:
- Maintain BUY with a target price of HK$70.00, representing an 83.5% upside. Kuaishou is currently trading at a 10x 2025F PE, in line with industry peers, with a 17% EPS CAGR expected over the next three years. The company’s valuation remains attractive, with significant upside potential across e-commerce, AI, and international expansion.
Thank you
