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Kuaishou shares dive after first annual report

Written by Song Jingli Published on     2 mins read

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Livestreaming revenue dropped in the fourth quarter.

Kuaishou (HKSE: 1024) shares plunged more than 12% on Wednesday in Hong Kong trading, closing at HKD 265. The stock appears to be pulling back after advancing since the IPO, due to high expectations from investors, DTZ Research lead analyst Ke Yan told KrASIA. On Tuesday, the company said it made RMB 58.8 billion (USD 9 billion) in revenue in 2020, up 50.2% year-on-year, in its first annual report since it went public last month.

The short video platform gained RMB 21.9 billion from online marketing services, including ads in the short video feeds, representing a 194.6% YoY increase. Last year, it launched an integrated advertising platform, expanded its salesforce, and teamed up with advertisers and content creators to deliver customized ad content.

Kuaishou earned RMB 33.2 billion from livestreaming, up 5.6% compared to one year earlier. In 2020, a total of 1.7 billion streaming sessions were held on the app. The number of monthly paying users (MPU) increased to 57.6 million, up from 48.9 million in 2019, but the average revenue per paying user (ARPPU) decreased to RMB 48 per month, from RMB 53.6 per month in 2019.

Livestreaming revenue also dropped in the fourth quarter, compared to the same quarter a year earlier, as watchers were less willing to tip streamers. The company still earned RMB 7.9 billion, down from RMB 8.5 billion, while monthly ARPPU decreased from RMB 56.6 to RMB 51.8.

Other services, mostly e-commerce, contributed a total of RMB 3.7 billion in revenue in 2020, a 13.3-fold surge from RMB 259.5 million in 2019. On the platform, the gross merchandise volume (GMV) also increased to RMB 381.2 billion, up from RMB 59.6 billion a year earlier.

The company reported a significant net loss of RMB 116.6 billion for the year, but attributed that mostly to fair value changes in preferred shares, which amounted to negative RMB 106.8 billion, primarily due to the increase in the valuation of the company. The adjusted net losses reached about RMB 7.9 billion last year.

Kuaishou raised USD 5.3 billion in its initial public offering last month, one of the largest in recent years. It almost tripled from its IPO price of HKD 115 to HKD 338 on the first day of trading.

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