Kuaishou - Attaching to TikTok's Tail

Have you heard of the thriving Chinese social platform Kuaishou? With more than 320 million daily active users, Kuaishou's short-form video-centric social media app has become China's second-largest short video platform. Douyin, the Chinese equivalent of TikTok, is currently in first place.

The original idea behind GIF Kuaishou, which was founded in 2011 as "GIF Kuaishou," was to facilitate the creation and sharing of animated images known as GIFs, which were the traditional form of short movies. The company then took the lead in China's short video sector, enabling mobile users to produce, view, and publish short videos.

This service was introduced in 2013, and its success has opened several avenues for Kuaishou. Its video-sharing application has developed not only in China, but globally as well. In eight countries, including Indonesia, Pakistan, and Taiwan, this program is among the most downloaded on Google Play and the Apple App Store.

The Chinese tycoon has experimented with live streaming, e-commerce, digital marketing, and gaming over the course of his career. Today, Kuaishou Technology is the 419th most valuable business in the world, with a market valuation of almost $40 billion.

Kuaishou generates revenue in numerous ways. Historically, its primary source of revenue was the live-streaming business section, which earns income from users purchasing virtual goods to give to their favorite streamers as gifts.

Additionally, the corporation derives income through advertising, online marketing, e-commerce, and gaming. As marketers rush to Kuaishou to submit their advertisements, Kuaishou profits by displaying these advertisements on its popular platform. Additionally, the corporation has a stake in in-game and e-commerce transactions.

Let's talk stocks. Kuaishou's debut on the stock exchange on February 5 of last year was not modest; it was fierce. On the day of its debut in Hong Kong, the value of its shares nearly tripled. Kuaishou's initial public offering raised a solid $5.32 billion, indicating another another win for the Hong Kong stock exchange.

After the IPO, the situation deteriorated. Increasing regulatory scrutiny from lawmakers and watchdogs, which curtailed the capabilities and flexibility of technology firms, dissuaded investors from Chinese tech companies. Alibaba, JD.com, Tencent, and the majority of Chinese companies have fallen prey to a vicious 2021.

In the most recent fiscal quarter, Kuaishou's financial results were outstanding.

• Revenue was $3.12 million, up 24% from the previous year.

• Gross profit increased 26% year-over-year to $1.30 million.

• Average Daily Active Users (DAUs): 345.5 million — an increase of 17% year-over-year.

• Average daily time spent per DAU increased 29% year-over-year to 128.1 minutes.

For the period ending on March 31, 2022, online marketing services accounted for 54% of total revenue, generating RMB 11.4 billion ($1.68 billion). Live streaming accounted for 37% of overall revenue, while other services contributed the remaining 9%.

The user traffic has expanded rapidly over the past year as a result of these astounding quarterly statistics. The amount of time users spend on the platform is increasing, and the number of active users is expanding by the minute.

The Kuaishou stock (HKG: 1024) has plummeted in 2021 following its market debut, and the long-term outlook is not particularly favorable. The conflict in Ukraine compounded decreases, while rising COVID-19 lockdowns and limitations in the Asian nation intensified investor aversion. However, Kuaishou remained resilient and fought 2022's headwinds.

It is safe to assert that the short-term outlook is hopeful. With a current price of HKD 75.20, the stock is trading in the center of its yearly range, between the two support levels of HKD 73 and HKD 54, and the two resistance levels of HKD 91 and HKD 110.

Analysts from numerous prestigious financial organizations anticipate a price objective for Kuaishou stock of HKD 109, a 45% increase from the current price. If the prosperous Kuaishou continues to produce outstanding achievements, it may exceed the fan-favorite Douyin in terms of popularity and total users. The road is lengthy, but a walkway has been established.