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<Research>Nomura Downgrades KUAISHOU-W (01024.HK) to Neutral, Chops TP to $57
Recommend 22 Positive 42 Negative 31 |
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KUAISHOU-W (01024.HK) had a cautious outlook for 2026, forecasting a full-year total revenue growth of about 4%, below the market consensus of 9.5%, Nomura published a research report saying. Advertising revenue accounted for 57% of total revenue, with management predicting a growth of about 6% in 2026, slowing from the 12% incline in 2025, becoming the main reason for the lower-than-expected revenue. Its e-commerce business, which has been a significant driver of advertising growth, contributed nearly half of its advertising revenue, but the broker expected that the GMV growth for e-commerce in 2026 will slow from last year's 15% to 7%. Although most dotcoms are increasing their investments in AI this year, KUAISHOU-W faced competition from ByteDance and TENCENT (00700.HK) in the short video segment, and competition in the e-commerce segment remains intense. Its AI video generation model, Kling, impressed the market during its launch in 2024, but competitors like Google's Veo 3 and ByteDance's Seedance 2.0 have narrowed the gap, raising concerns about ongoing competition intensification. Therefore, the broker downgraded KUAISHOU-W from Buy to Neutral, and chopped its target price from $77 to $57, based on a SOTP valuation method, corresponding to an unchanged projected 2026 PE ratio of about 13x. The current price of KUAISHOU-W's H-shares corresponds to a predicted 2026 PE ratio of about 12.3x. Nomura preferred Alibaba Group (BABA.US) and TENCENT within the sector. AASTOCKS Financial News Website: www.aastocks.com |
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