Intrinsic Value Kuaishou Technology (1024.HK)

• Previous Close: HK$80.15
• Intrinsic Value: HK$165.19
• Upside potential: +106%

Stock Valuation Context

Business Model And Market Position

Kuaishou Technology operates as a leading short-video and live streaming platform in China, generating revenue primarily through live streaming virtual gifts, online marketing services, and e-commerce commissions. The company's diversified ecosystem includes flagship app Kuaishou, video sharing platform AcFun, and various content creation tools, positioning it as a comprehensive social entertainment hub. Kuaishou maintains a strong market position as China's second-largest short-video platform, particularly dominant in lower-tier cities where it has cultivated deep user engagement through its community-focused approach. The platform's unique dual-column interface and algorithm prioritize authentic content, differentiating it from competitors and fostering strong creator-viewer relationships. Kuaishou's expansion into live-streaming e-commerce represents a significant growth vector, leveraging its massive user base to create a closed-loop ecosystem from content discovery to transaction completion.

Revenue Profitability And Efficiency

Kuaishou delivered robust financial performance with HKD 126.9 billion in revenue and HKD 15.3 billion net income for FY2024, demonstrating significant profitability improvement. The company generated HKD 29.8 billion in operating cash flow, indicating strong cash conversion from its core operations. This performance reflects effective monetization of its large user base through multiple revenue streams including live streaming, advertising, and e-commerce services.

Earnings Power And Capital Efficiency

The company achieved diluted EPS of HKD 3.48, showcasing substantial earnings power recovery. With zero capital expenditures reported, Kuaishou appears to be operating efficiently while maintaining its platform infrastructure. The strong operating cash flow generation relative to net income suggests high-quality earnings and effective working capital management across its diverse business segments.

Balance Sheet And Financial Health

Kuaishou maintains a solid financial position with HKD 12.7 billion in cash and equivalents against HKD 29.5 billion in total debt. The company's market capitalization of HKD 325.2 billion reflects investor confidence in its growth trajectory. The balance sheet structure supports ongoing investments in technology and content ecosystem development while maintaining financial flexibility.

Growth Trends And Dividend Policy

The company initiated a dividend policy with HKD 0.46 per share, signaling maturity and commitment to shareholder returns. This dividend initiation, combined with continued revenue growth and profitability expansion, indicates successful transition from growth phase to sustainable monetization. The policy balances returning capital to shareholders with retaining funds for strategic investments in content and technology.

Valuation And Market Expectations

Trading with a beta of 1.092, Kuaishou's stock exhibits moderate sensitivity to market movements. The current valuation reflects expectations for continued market share gains in China's competitive short-video and live streaming landscape. Investors appear to be pricing in sustained growth in e-commerce monetization and advertising revenue diversification.

Strategic Advantages And Outlook

Kuaishou's deep penetration in lower-tier cities and strong community ecosystem provide sustainable competitive advantages. The platform's integration of content, social features, and e-commerce creates multiple monetization pathways. Ongoing investments in AI recommendation algorithms and content diversity should support user engagement and revenue growth across all business segments in the evolving digital entertainment landscape.

Sources

Company annual reportHong Kong Stock Exchange filingsBloomberg financial data