China's Kuaishou slumps as analysts flag growth pressure despite strong results

"Kuaishou's revenue growth is expected to slow notably, while heavier AI investment is pressuring margins, leading to a market re-rating."

"The subdued outlook is attributed to a combination of factors, including rising subsidies for the company's e-commerce operations that could hurt advertising revenue growth."

"Revenue for its live-streaming operations could also be hit by mainland China's increasing scrutiny of the sector, according to Huatai Securities' research note."

"Kuaishou reported fourth-quarter revenue of 39.57 billion yuan (US$5.7 billion), a 12 percent jump from a year earlier."

Kuaishou's shares dropped more than 13% to HK$45.96 following a report of strong sales growth. Analysts expressed concerns about the company's core advertising and live-streaming businesses facing pressure this year. Heavy spending on artificial intelligence is impacting profit margins, leading to a cautious growth outlook. Revenue growth is expected to slow significantly, with forecasts predicting only 4.5% growth by 2026. Increased scrutiny of live-streaming operations and rising e-commerce subsidies are also contributing to the subdued outlook.

Read at South China Morning Post