Shulou(Shulou.com)11/24 Report--

On November 21, Kuaishou Technology released its results for the third quarter of 2023, with total revenue up 20.8% year-on-year to 27.95 billion yuan. Of this total, revenue from online marketing services was 14.69 billion yuan, up 26.7 percent from the same period last year, live broadcast revenue was 9.72 billion yuan, up 8.6 percent from the same period last year, and revenue from other services (including e-commerce) was 3.54 billion yuan, up 36.6 percent from the same period last year.

In the case of strong growth in the main business, Kuaishou's profitability increased significantly. In the third quarter, Kuaishou not only made a group-level IAS net profit of 2.18 billion yuan, but also increased its adjusted net profit to 3.17 billion yuan from the previous month, significantly exceeding the consensus estimate of 2.66 billion yuan in the Bloomberg market.

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In terms of user ecological construction, with efficient user growth strategy, rich supply of high-quality content and continuous optimization algorithm, the number of users of Kuaishou reached a new high in this quarter, with the average number of daily active users growing by 6.4% to 387 million compared with the same period last year. The average number of monthly active users increased by 9.4% to 685 million. In terms of social stickiness, the number of users who followed each other reached 32.2 billion pairs by the end of the third quarter of 2023, an increase of nearly 40 per cent year-on-year.

Cheng Yi, founder and CEO of Kuaishou Technology, said with a smile: "in the third quarter of 2023, our business continued to expand and our profitability grew steadily. This is due to revenue growth in our core business and continued improvement in ROI, as well as our strategic focus on operational efficiency. We will continue to foster high-quality growth in Kuaishou's powerful content ecology, integrate more profit opportunities in different user scenarios, and enrich our ecosystem with more diversified content and advanced technological capabilities. Looking ahead, we will further promote innovation, explore new growth points, shape the industry landscape, empower content creators, marketing customers and merchants, consolidate Kuaishou's core position as a leading content community and social platform, and open up brighter future prospects for our shareholders and ecosystem partners. "

The strong development of the main business leads to the steady growth of Q3 revenue and profits

In this quarter, while the revenue of all business lines continued to grow, Kuaishou's profitability increased significantly, not only for two consecutive quarters, but also to 3.17 billion yuan after adjustment. Compared with 2.69 billion yuan in the second quarter of 2023, the month-on-month increase was 17.8%.

The continued improvement in profitability is not only due to Kuaishou's rising operational efficiency, but also to the steady development of Kuaishou's main businesses such as online marketing, e-commerce and live streaming.

According to the financial report, Kuaishou's revenue from online marketing services (advertising) reached 14.69 billion yuan this quarter, an increase of 26.7% over the same period last year, while the number of active marketing customers increased by more than 140%.

The third quarter has always been the peak season of content flow of Kuaishou. Based on Kuaishou's unique ecological characteristics and perfect product links, Kuaishou's brand advertising business is booming this quarter, with popular style content such as short plays, summer holidays and the Asian Games. While effectively enhancing user activity, it also better combines popular style content with the brand marketing demands of advertisers. For example, the commercial bespoke short drama "Beauty becomes True", which was launched during the summer, has brought 1.09 billion of the exposure to Tmall International. And Kuaishou and China Mobile's "National Champion Dream, Asian Games move" project, through the combination of online and offline, has finally achieved 960 million exposure for China Mobile.

In addition, this quarter, through the further refinement of the operation of the subdivided industry and encouraging the release of native materials, Kuaishou's consumption of external circulation native promotion materials increased by more than 30% compared with the previous quarter. Internal circulation, May test upgrade of the site-wide promotion products in the third quarter, marketing customer consumption increased nearly 5 times.

In terms of e-commerce business, under the guidance of the three strategies of low-price good goods, high-quality content, and intimate service, Kuaishou e-commerce GMV reached 290.2 billion yuan in the third quarter, achieving a year-on-year growth of 30.4% in the off-season. Among them, the brand and pan-shelf performance is more eye-catching. In the third quarter, the proportion of brand goods, including fast brands, increased further compared with the same period last year, with well-known brands self-broadcast GMV growing by nearly 90 per cent year-on-year. Pan-shelf GMV accounts for nearly 20 per cent of total GMV.

The off-season growth of e-commerce GMV also benefits from the fact that Kuaishou continues to enrich e-commerce supply and optimize the ecology. On the supply side, in the third quarter, through the refined hierarchical operation system of merchants, the average monthly mobile sales increased by about 50% compared with the same period last year. In terms of ecology, Kuaishou continues to pay attention to the growth of the middle waist and long tail of the platform, improve the distribution database, and carry out hierarchical operation for the top people. In the third quarter, the proportion of the total GMV of Kuaishou waist and below has gradually increased from 20% + at the beginning of 21 to nearly 50% in this quarter, and the ecological health has been further improved.

The continuous prosperity of supply and ecology has also further boosted user demand. Financial data show that Q3 in 2023, the average number of monthly buyers of Kuaishou is close to 120 million, and the monthly single frequency is growing steadily compared with the same period last year.

Recently, Kuaishou has just finished its Singles Day promotion this year. On this year's Singles Day, Kuaishou's e-commerce GMV and orders have reached record highs, with an one-day peak, and brands and general shelves have become bright spots of growth. According to the data, nearly 100 million Kuaishou consumers and more than 1 million merchants and talent participated in the promotion. Orders for the full cycle of Singles' Day increased by nearly 50%, GMV of small and medium-sized businesses increased by 75%, and brand GMV increased by 155%.

The scale of users has reached a new high, continuously providing diversified and high-quality content.

In the third quarter, with efficient user growth strategy, rich supply of high-quality content and continuously optimized algorithms, the number of Kuaishou users reached a new record, with the average number of daily active users growing by 6.4% year-on-year to 387 million, and the average number of monthly active users growing by 9.4% to 685 million. The social intelligence of the platform continues to strengthen. By the end of the third quarter of 2023, the number of users who followed each other reached 32.2 billion pairs, an increase of nearly 40% over the same period last year. The total number of daily interactions on the platform (including likes, comments, retweets and private messages, etc.) exceeded 10 billion.

In terms of content ecology, Kuaishou continues to develop popular style content and original feature content.

In terms of popular style and content, as a licensed broadcaster and official short video sharing platform for the 19th Asian Games in Hangzhou, Kuaishou has attracted 230 million users to watch the Asian Games every day with its rich Asian Games content and hard-core live broadcast technology, and 53.1 billion Asian Games-related works have been viewed. Kuaishou Entertainment also launched exclusive live broadcasts of Jolin Tsai and Jackie Chan in July, and launched 85 Kuaishou skits in the summer, 21 of which had more than 100 million broadcasts.

In terms of useful content, Kuaishou Pan knowledge joined 61 university professors and 149 well-known experts in September to introduce quality educational resources to users in the form of "short video + live broadcast". According to the data, the high-quality courses of famous teachers in the school season attracted a total of 86.18 million viewers, with 4.35 million likes in the live broadcast. Kuaishou Health also launched the Kuaishou first Aid month activity in September, imparting a large amount of absorbable and applicable life first aid knowledge to users in various forms, and 620 million topics related to the activity were broadcast.

In addition, Kuaishou LVB is also continuing to promote the training of high-quality content and anchors. The Chinese Art inheritance Program launched in September this year supports the growth of all kinds of traditional cultural anchors with the help of platform support of tens of millions of traffic and professional training. At the same time, Kuaishou LVB is also constantly promoting AIGC landing scenes such as virtual human LVB, providing relevant authors with low-level technical capabilities such as real-time capture, special effects props, virtual interaction and so on.

Build inclusive digital community and technology to create a better life

Relying on the advantages of the platform, Kuaishou has not only excavated the content and commercial vitality, but also landed a large number of innovative measures in the areas of social value and inclusive digital community construction.

As an example of "live +" mode enabling traditional industries, driven by summer vacation and autumn recruitment this quarter, the average daily resume delivery number of Kuaishou fast hiring business has increased by more than 200% compared with the same period last year. At the same time, Kuaishou also held the 2023 Kuaishou annual summit, at which Kuaishou announced that it would invest 1000 billion traffic to support businesses and help 300 million people find jobs.

At the Kuaishou conference held in September, Kuaishou announced the launch of the Village broadcast "Star Project". In the next three years, it will invest 10 billion yuan in flow and 50 million yuan in cash to train 1 million village broadcasters and 1000 rural entrepreneurs to provide talents to 160 key counties to help them, and further increase the density of rural talents.

In the real estate sector, by the end of the third quarter of 2023, Kuaishou idealist business had covered more than 120 cities across the country, with a cumulative real estate transaction volume exceeding 14 billion yuan in the third quarter. In September, the 96 Anjia Day, launched by ideal Home, attracted more than 4.6 million participants, leading to the sale of more than 5500 units in 66 cities.

Centering on the local life business, which is in a period of rapid growth, Kuaishou launched the "Flying Bird Project", which helped more than 2000 creators grow and transition in the third quarter through the support of platform resources such as flow, good goods, training and so on.

In addition, this quarter, Kuaishou has also produced a number of breakthroughs in technological research and development. For example, Kuaishou independently developed the large language model "happy" and Vincent map model "Ketu", which have been combined with search, comment, commercialization and other scenarios, internally tested a number of landing short video live streaming products, and created intelligent applications such as "AI Intelligent Dialogue", "AI Express" and intelligent customer service, which can not only enhance the user experience and platform activity, but also create greater commercial value.

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The SL200 chip developed by Kuaishou StreamLake also won the first place in 16 events in the MSU2022 World Encoder Competition. The chip integrates many leading key technologies, which can maximize the quality of video, audio and picture, and can save about 30% bandwidth cost compared with the mainstream of the industry at the same quality.

In terms of efficiency improvement, in the past few quarters, through measures such as self-built data centers, Kuaishou's server depreciation and bandwidth share have also declined steadily. According to reports, Kuaishou Intelligent Cloud Wulanchabu data Center, which was officially put into operation in July this year, as one of the largest "big data + artificial intelligence" data centers in China, is expected to save about 500 million kilowatt hours of electricity each year, and the total cost and energy consumption of IDC are reduced by more than 30%.

Through persistent mode innovation and scientific and technological innovation, Kuaishou not only develops steadily, but also hopes to help more people improve their lives with science and technology and develop better in the digital age.

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