By Tracy Qu


Kuaishou Technology beat revenue and earnings estimates in the first quarter, helped by rising numbers of advertisers on the Chinese company's short-video platform and growth in its e-commerce business.

The Beijing-based company reported net profit of 4.12 billion yuan ($575.1 million), compared with net loss of CNY876 million a year earlier, it said Wednesday. That beat an estimate for net profit of CNY2.30 billion in a poll of analysts by FactSet.

Kuaishou, which competes with TikTok parent ByteDance, said quarterly revenue rose 17% to CNY29.41 billion, beating analysts' expectations of CNY28.99 billion.

Revenue from online marketing services, which made up just over half of sales, rose 27%, thanks to growth in client numbers and clients' increased consumption. Revenue from other services increased 48%, driven by growth in its e-commerce business. The company also derived significant revenue from its livestreaming business, which sells virtual gifts that viewers give to streamers.

The number of average daily active users on Kuaishou's app increased 5.2% to 393.8 million in the first quarter, it said.

The company's gross profit margin increased to 55%, compared with 46% in the same period last year. Meanwhile, selling and marketing expenses fell 8.0%, while administrative expenses dropped 39%.

Kuaishou, whose backers include Chinese social media and gaming giant Tencent, internet search specialist Baidu, and Hongshan Capital, formerly known as Sequoia Capital China, went public in a multibillion-dollar offering in early 2021.

Shares fell sharply during China's regulatory crackdown on the tech industry in 2021 and 2022, and today are about 86% off their 2021 peak, but have risen about 10% since the beginning of this year amid an improving bottom line.

Kuaishou said Wednesday that the company "commenced the year with robust operational and financial performance" during the first quarter. The company added that it has made steady growth in using artificial intelligence to upgrade its existing businesses.

Total e-commerce gross merchandise value expanded 28% to CNY288.07 billion for the first quarter. Kuaishou has ramped up efforts in its e-commerce business, hoping to make it a major revenue source of the company.


Write to Tracy Qu at tracy.qu@wsj.com


(END) Dow Jones Newswires

05-22-24 0545ET