By Tracy Qu


Kuaishou Technology unveiled plans for a US$2 billion share buyback and posted a quarterly earnings beat, 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 (US$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. That was helped by a 27% rise in revenue from online marketing services, which made up more than half of sales.

Sales from its livestreaming business, which allows viewers to send virtual gifts to streamers, fell 8.0%, while growth in its smaller e-commerce business drove revenue from other services 48% higher. Total e-commerce gross merchandise value expanded 28% to CNY288.07 billion, bolstering efforts to make the business a major revenue source.

Average daily active users on the company's Kuaishou app rose 5.2% to 393.8 million in the quarter, while the number of active marketing clients rose almost 90%, it said.

Gross profit margin increased to 55% from 46% a year ago. Meanwhile, selling and marketing expenses rose 7.6%, while administrative expenses dropped 50%.

Kuaishou also unveiled plans to spend up to 16 billion Hong Kong dollars(US$2.05 billion) on share repurchases over three years beginning next month.

Shares of Kuaishou, whose backers include Chinese social-media and gaming giant Tencent, internet search specialist Baidu, and Hongshan Capital, formerly known as Sequoia Capital China, have fallen more than 80% from their peak in 2021 after a multibillion-dollar offering.

The company was hard hit by a regulatory crackdown on China's tech industry in 2021 and 2022 and the country's tepid economic recovery from the pandemic, but shares have risen nearly 10% this year, helped by an improving bottom line.


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


(END) Dow Jones Newswires

05-22-24 0743ET