Kuaishou Shares Fall as Concerns of Weak China Consumer Demand Linger

Dow Jones11-21

By Sherry Qin

Kuaishou Technology's shares fell sharply on persisting concerns about its e-commerce business amid weak consumer sentiment in China.

The Chinese short-video operator's shares declined 11% early Thursday to 46.90 Hong Kong dollars, equivalent to $6.03.

The Beijing-based company reported third-quarter results that came in line with expectations, supported by strength in advertising. Its net profit jumped 50% to 3.27 billion yuan, while its adjusted net profit rose about 24%.

However, the company's e-commerce gross merchandise value, a measure of total goods sold, grew by less than 20% for a second straight quarter, due to weak consumer sentiment and fierce competition.

The decline in Kuaishou's GMV growth "raises questions what would be its growth drivers in the future," said Nomura analyst Jialong Shi.

The short-video app rivals Douyin, TikTok's sister app in China, but competition is intensifying as Tencent's video accounts, embedded in its WeChat superapp, gain traction.

Kuaishou's management noted that consumer demand remains weak, but they are confident that "short video remains one of the best industries for growth."

Citi analysts reckon Kuaishou could deliver GMV growth of 14% on year in the final quarter, a peak shopping season, after its decent performance during the Singles' Day shopping festival in China.

A "likely GMV slowdown in 2025 remains the key concern for investors," Daiwa analyst John Choi said.

Write to Sherry Qin at sherry.qin@wsj.com

(END) Dow Jones Newswires

November 20, 2024 22:39 ET (03:39 GMT)

Copyright (c) 2024 Dow Jones & Company, Inc.

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Its net profit jumped 50% to 3.27 billion yuan, while its adjusted net profit rose about 24%. \n\n\n  However, the company's e-commerce gross merchandise value, a measure of total goods sold, grew by less than 20% for a second straight quarter, due to weak consumer sentiment and fierce competition. \n\n\n  The decline in Kuaishou's GMV growth \"raises questions what would be its growth drivers in the future,\" said Nomura analyst Jialong Shi. \n\n\n  The short-video app rivals Douyin, TikTok's sister app in China, but competition is intensifying as Tencent's video accounts, embedded in its WeChat superapp, gain traction. \n\n\n  Kuaishou's management noted that consumer demand remains weak, but they are confident that \"short video remains one of the best industries for growth.\" \n\n\n  Citi analysts reckon Kuaishou could deliver GMV growth of 14% on year in the final quarter, a peak shopping season, after its decent performance during the Singles' Day shopping festival in China. \n\n\n  A \"likely GMV slowdown in 2025 remains the key concern for investors,\" Daiwa analyst John Choi said. \n\n\n \n\n\n  Write to Sherry Qin at sherry.qin@wsj.com \n\n\n \n\n\n  (END) Dow Jones Newswires\n\n\n  November 20, 2024 22:39 ET (03:39 GMT)\n\n\n  Copyright (c) 2024 Dow Jones & Company, Inc.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"-1","news_tag":"economic","news_rank":0,"symbols":[],"gpt_button":0},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.3","shortVersion":"4.29.3","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2485104481"}