科網股估值有望修復？近期行情你看好嗎？
From the hottest new stock in the Hong Kong stock market to a trillion-dollar market cap evaporating, what has happened to Kuaishou?
Produced by Radar Finance, written by Yanrui Wu, edited by Shenhai.
On July 7th, Kuaishou's stock price fell to a new low of 163.5 Hong Kong dollars this year, a decline of 3.39% during the day. It finally closed at 165.1 Hong Kong dollars. On February 16th of this year, Kuaishou's intraday high reached 417.8 Hong Kong dollars. Based on this calculation, Kuaishou's market cap has evaporated by 1.05 trillion Hong Kong dollars compared to its highest point.
Why has Kuaishou's stock price fallen despite being touted as the first short video company to go public? Some analysts believe that negative information caused by counterfeit goods, huge losses, and pressure from TikTok have all contributed to the company's stock price decline.
Kuaishou's stock price drops six percent from its highs.
It has been five months since Kuaishou went public on February 5th, with its stock price dropping from a high of 417.8 to a low of 163.5, a decline of 60.87%.
On February 5th, 2021, Kuaishou went public as the first short video company on the Hong Kong stock market, with an issuance price of 115 Hong Kong dollars. On the day of the IPO, the opening price was 338 Hong Kong dollars, and the closing price was 300 Hong Kong dollars. The total market value exceeded one trillion Hong Kong dollars, making it the hottest new stock in the history of the Hong Kong stock market at that time.
On February 16th of this year, Kuaishou's intraday high reached 417.8 Hong Kong dollars, pushing its total market value to 1.74 trillion Hong Kong dollars. Kuaishou's market value surpassed JD.com, becoming the fourth largest company on the Hong Kong stock market behind Tencent, Alibaba, and Meituan.
From February 18 onwards, in the next 20 days, Kuaishou's stock price has been in a downward trend almost every day, reaching a low of HK$250 per share. According to the daily market statistics of Hithink Royalflush Information Network, out of the 100 trading days from the day of listing to July 6, the stock price fell on 60 trading days, accounting for 60%. Compared to the highest point, the market cap evaporated by over a trillion Hong Kong dollars. With such a huge decline, Kuaishou has also become the company with the largest annual decline among the 228 listed companies in the Hang Seng industry.
It is worth mentioning that on June 23, at a conference in Beijing, the CEO of Kuaishou, Su Hua, revealed: "Kuaishou's global monthly active users have reached 1 billion." Stimulated by this news, Kuaishou's Hong Kong stocks rose by more than 6% intraday.
Some analysts believe that Su Hua's move is to boost Kuaishou's stock price.
According to the report released by DataReportal, as of April 2021, TikTok had 0.732 billion monthly active users, Douyin had 0.6 billion monthly active users, and Kuaishou had 0.481 billion monthly active users.
Industry insiders claim that Su Hua's algorithm may have combined the users of Kuaishou app, Quick Version, WeChat Mini Program, and overseas version Kwai together, totaling 1 billion. However, there is a high overlap rate between Kuaishou APP, Kuaishou Quick Version, and WeChat Mini Program users, making the data released by Su Hua inaccurate.
The decline in Kuaishou's stock price has also triggered dissatisfaction among investors.
"The shortest-lived horse stock has appeared", "Kuaishou is really a leek harvester", "copy halfway up the mountain?" There are also investors in the stock bar who have criticized Kuaishou's stock price.
Why the decline? Negative factors + huge losses + competition from Douyin.
Shortly after its IPO, company executives at Kuaishou were arrested for accepting huge bribes.
In February this year, media reports stated that Zhao Danyang, former vice president of Kuaishou and head of the Community Content Research Institute, was arrested for bribery shortly after leaving the company. According to an internal email notification from Kuaishou in November last year, Zhao Danyang, then subordinate Li Lei and Xu Juan, were also arrested by the police for embezzling company property for a long time and suspected of committing crimes, with a large amount involved. At the same time, shortly after Zhao Danyang's arrest, the former head of the Content Ratings Department and Wuhan Center at Kuaishou was taken away by the police for accepting bribes from multiple suppliers, involving a large sum of money. This arrest of Zhao Danyang for bribery is the first time since the establishment of Kuaishou that a company executive has been revealed to be involved in corruption.
In addition, the quality issues of Kuaishou's e-commerce have been repeatedly mentioned, with the most notable being the Duowei mobile phone refunding nine incident.
On May 22, digital blogger 'Tech Xiaoxin' released a video claiming that the Duowei 12Pro phone purchased in the live broadcast room 'Lu Sisao Rong' on the Kuaishou platform was a counterfeit. According to Kuaishou's subsequent response, on the 18th, Kuaishou's e-commerce had already discovered that the products in question had quality issues leading to abnormal returns and initiated an investigation. After the blogger spoke out, Kuaishou removed all Duowei phones of that model from the platform.
On May 25, according to previous investigation results, the products indeed had quality issues. Kuaishou stated that for consumers who had already purchased the 'Duowei 12Pro' phone, they would provide a 'refund without return' guarantee and temporarily remove all Duowei model products.
On May 28, Kuaishou announced the final resolution of the incident. On the supplier side, Kuaishou banned the sale of all products under the Duowei brand on the Kuaishou e-commerce platform, never to cooperate with the related companies again. On the consumer side, consumers who purchased the 'Duowei 12Pro' phone on Kuaishou e-commerce were compensated nine times the amount on the basis of 'refund without return'.
On June 2, Kuaishou once again carried out rectification. Kuaishou e-commerce removed 12 mobile phone brands including Duowei, Sony, and Royole, and updated the list of brands eligible for the Good Things Alliance.
In addition to the negative news, the company is also facing huge losses.
From 2017 to 2020, Kuaishou's revenue was RMB 8.34 billion, 20.301 billion, 39.12 billion, and 58.776 billion respectively, with year-on-year growth rates starting from 2018 at 143.43%, 92.70%, 50.24%. Kuaishou's net income attributable to the parent company shareholders in 2017 was -20.045 billion, -12.429 billion in 2018, -19.652 billion in 2019, and -116.635 billion in 2020, with year-on-year growth rates of 37.99% in 2018, -58.11% in 2019, -493.52% in 2020.
In the first quarter of 2021, Kuaishou's revenue was 17 billion yuan, a year-on-year increase of 36.61%, a quarter-on-quarter decrease of 5.59%. This translates to a decrease of 0.9 billion yuan in Kuaishou's revenue in the first quarter of 2021 compared to the fourth quarter of 2020. The net income attributable to the parent company in 2020 was -57.75 billion yuan, with a year-on-year decrease of -89.40%.
In the revenue composition in the first quarter of 2020, the proportion of online marketing services (advertising) exceeded half for the first time, accounting for 50.28% of revenue. Previously, the live streaming business, which had the largest share of revenue, gradually decreased. The proportions from 2017 to the first quarter of 2021 were 95.32%, 91.70%, 80.37%, 56.50%, 42.60%.
Specifically, in the first quarter of 2020, Kuaishou's live streaming revenue decreased from 9 billion yuan in the same period of 2020 to 7.3 billion yuan, a year-on-year decrease of 19.5%. Behind the decrease in live streaming revenue is the decrease in paying live stream users, with the average monthly paying users for live streaming decreasing from 67 million in the same period of 2020 to 52.4 million. The financial report explains that due to the isolation during the pandemic last year, more users turned to online entertainment activities. However, in the first quarter of this year, the public has returned to normal life patterns, leading to a reduction in time spent on online activities.
Furthermore, the high marketing expenses are also part of the reason for Kuaishou's losses.
From 2017 to the first quarter of 2021, Kuaishou's sales expenses were 1.36 billion yuan, 4.262 billion, 9.865 billion, 26.615 billion, 11.66 billion yuan, while the corresponding cost of sales during the same period was 5.729 billion, 14.498 billion, 25.017 billion, 34.961 billion, 10.032 billion yuan.
Radar Finance noted that on the evening of May 24, Kuaishou released its first-quarter financial report, and its stock price fell by 11% by the closing price on May 25.
Industry insiders told Radar Finance that even though Kuaishou boasts being the first public short video platform, its survival space is squeezed by Douyin, and its overseas expansion faces direct competition from TikTok. This has made it challenging for Kuaishou to establish a moat. Without a solid foundation, Kuaishou can only increase investments continuously to find new growth points, leading the company to face profitability challenges for a considerable period of time.
Note: This article is original content from Radar Finance (ID: leidacj). Reproduction without permission is prohibited.
Risk Disclaimer: The above content only represents the author's view. It does not represent any position or investment advice of Futu. Futu makes no representation or warranty.Read more
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