by Justina Lee
Shares of Chinese video-sharing company Kuaishou Technology rose on Wednesday in line with the company’s first-quarter loss in revenue.
Shares rose 5.6% to HK$66.90 (US$8.52) in morning trading, before posting a gain of HK$66.75, reducing year-on-year loss to 7.6%.
Kuaishou said late Tuesday that its first-quarter loss narrowed to 6.25 billion yuan (US$939.3 million) from a net loss of CNY57.75 billion a year earlier, while revenues in marketing services, e-commerce business and livestreaming declined. increased by 24%. ,
Daiwa Capital analysts Carlton Lai and Steven Ni said in a research note that Kuaishou’s second quarter could be challenging due to China’s COVID-19 lockdown, and macroeconomic headwinds slashed the target price from HK$150 to HK$122. gave.
Nevertheless, Daiwa analysts maintained a buy rating saying “we are confident that Kuasho will outperform the industry and capture market share,” helped by efforts to expand product offerings.
Nomura analysts Jialong Xi and Thomas Shen cautioned in a note that given severe lockdowns and supply-chain disruptions in the second quarter, Kuaishou may have to rely on more aggressive cost controls that could hurt revenues.
“Since May, the situation has improved slightly, but is far from normal,” said analysts at Nomura. Given the “strict and unpredictable” nature of lockdowns by local governments in China, “it is difficult even for industry players to think that the e-commerce industry can be completely out of the woods.”
Nomura maintained a buy rating on Kuaishou and a target price of HK$100.
Write to Justina Lee at [email protected]
Credit: www.marketwatch.com /