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The original title Kuaishou passed the Hong Kong Stock Exchange listing hearing last year’s first three quarters of revenue reached 40.7 billion yuan
Our reporter Yu Mengmeng
On January 15, Kuaishou passed the Hong Kong Stock Exchange listing hearing and uploaded the post-hearing data set. In the first three quarters of 2020, Kuaishou’s total revenue reached 40.7 billion yuan. Revenue from major businesses has increased substantially. Among them, live broadcast revenue was 25.3 billion yuan, online marketing service revenue was 13.3 billion yuan, and other services such as e-commerce, online games, and online knowledge sharing revenue were 2 billion yuan.
Kuaishou’s revenue structure continues to be optimized. The share of non-live streaming services in total revenue has increased from 31.5% in the first half of 2020 to 37.8% in the first three quarters of 2020. Industry insiders pointed out that based on the content ecology, Kuaishou gradually opened up commercialization paths for advertising, e-commerce, education, and games.
Short video leader
Kuaishou has gone through 9 rounds of financing before. As of November 2020, the top five shareholders are Tencent, Wuyuan Capital, Reach Best, Ke Yong and DCM, holding 21.57%, 16.66%, 12.65%, 10.02% and 9.23% of the shares respectively. Among them, the actual controllers of Reach Best and Ke Yong are co-founders Su Hua and Cheng Yixiao respectively. Kuaishou adopts a different voting rights structure. Among them, only the co-founders Su Hua and Cheng Yixiao hold the company’s Class A shares, accounting for 55.79% and 44.21%, respectively. They exercise voting control and become the actual controlling shareholder without owning most of the economic interests of the company’s equity.
According to the data, the predecessor of Kuaishou is “GIF Kuaishou”, which is a tool for generating animations and was founded in 2011 by the team led by Cheng Yixiao. During the GIF Kuaishou period, it was spread on Weibo with the help of animated pictures. At the end of 2012, GIF Kuaishou transformed from the tool field to the community field. With the help of investors, Cheng Yixiao met Su Hua. Su Hua used to work at Google and Baidu.
In 2013, the Cheng Yixiao team merged with the Su Hua team, and the two divided their labor. Cheng Yixiao was the chief product officer, focusing on products and operations; Su Hua was the CEO, responsible for machine algorithms and external matters. After the teams were merged, the recommendation algorithm was applied to content distribution, the user experience improved significantly, and the number of users increased rapidly. In 2014, “GIF Kuaishou” was renamed “Kaishou”.
Subsequently, Kuaishou developed into the fast track. In terms of daily active users, Kuaishou has now exceeded 300 million.
In terms of user scale and penetration rate, the monthly active user scale of the short video industry has rapidly increased from 134 million in March 2016 to 852 million in June 2020. After June 2019, the mobile Internet penetration rate of short video apps has stabilized above 70%. In terms of the proportion of user time, in the first quarter of 2020, the average daily usage time of a short video APP reached 21.1%, far exceeding online video (10.4%) and second only to instant messaging (22.8%).
The financial report shows that the operating income of Kuaishou from 2017 to 2019 was 8.34 billion yuan, 20.301 billion yuan, and 39.120 billion yuan, an increase of 143.43%, 92.7%, and 48.26% respectively. From the perspective of revenue structure, live broadcast services still contribute most of the revenue. Due to the rapid growth of advertising business revenue, the proportion of live broadcast revenue has dropped from 95.32% in 2017 to 62.22% in the first three quarters of 2020. The company actively seeks to monetize e-commerce and other businesses. Revenue from other services rose from 20 million yuan in 2018 to 260 million yuan (0.6%) in 2019, and 2 billion yuan (5%) in the first three quarters of 2020.
E-commerce GMV nearly 100 billion in a single season
In the third quarter of 2020, the Kuaishou platform business maintained a good momentum, with various business data growing to varying degrees. As of September 30, 2020, the average daily active users of Kuaishou apps and mini programs in China are 305 million, and the average monthly active users are 769 million; there are nearly 1.4 billion live broadcasts on the Kuaishou app; short video inventory on the Kuaishou app The total is about 29 billion.
The prospectus shows that online marketing services, live broadcasts, and e-commerce businesses have maintained growth. Kuaishou’s revenue in the third quarter of 2020 reached 15.4 billion yuan, equivalent to 60.6% of the revenue in the first half of the year. Among them, online marketing service revenue accounted for the fastest growth rate of total revenue share, rising from 4.7% in 2017 to 8.2% in 2018, 19.0% in 2019, and 32.8% in the first three quarters of 2020.
At the same time, the revenue of other businesses such as e-commerce and online games increased significantly, mainly due to the GMV of Kuaishou e-commerce reaching 94.5 billion yuan in the third quarter of last year. Kuaishou live broadcast e-commerce started in 2018 and is still in the “cultivation period”.
Guojin Securities Research Report pointed out that Kuaishou is still supporting high-quality merchants to improve brand image and achieve rapid growth of GMV through subsidies. At the same time, the investment in the ecological chain of industry + live broadcast has made Kuaishou a huge expenditure and lower profit margins. After a complete and benign e-commerce ecosystem is established, the monetization rate is expected to increase.
Relying on a strong content ecology and a highly viscous community atmosphere, the Kuaishou e-commerce platform has shown greater growth potential. According to iResearch, as live broadcast e-commerce becomes more and more common, China’s live broadcast e-commerce GMV is expected to reach 6.4 trillion yuan in 2025.
Narrowing losses
A reporter from China Securities News noted that the application version submitted by Kuaishou earlier disclosed that due to large-scale investment in product promotion, brand marketing, and technology research and development, there was an adjusted loss of 6.35 billion yuan in the first six months of 2020. .
The data set released after the hearing on January 15 showed that the adjusted net loss of Kuaishou in the first three quarters of 2020 was 7.39 billion yuan. From this calculation, the third quarter lost 1.04 billion yuan, with an average monthly loss of about 350 million yuan. In the first half of 2020, the average monthly loss was about 1.06 billion yuan.
Based on the content ecology, Kuaishou is providing more diverse products and services, including entertainment, online marketing services, e-commerce, online games, online knowledge sharing, etc., and is constantly exploring expansion space through investment and mergers and acquisitions.
According to statistics from iResearch, with wider user participation and more diverse content production, China’s short video and live broadcast platforms still have room for continuous growth in the future. Based on the huge domestic short video and live broadcast industry market, and the massive space for future online marketing services, e-commerce and other businesses.
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