Technology Author: Tommy Mi Mar 01, 2022 11:11 AM (GMT+8)

Morgan Stanley recently upgraded Kuaishou Technology's rating to overweight from equal weight with a target price of HKD 120.

Kwai Fu

According to Morgan Stanley, Kuaishou Technology's has been improving its operating efficiency since the second half of 2021. Kuaishou Technology's rating of overweight came from discussions with CMOs and Marketing Strategists of 175 companies. The company's rating not only comes from reduced operating costs, but also increased profitability in 2022. According to economists in China, Kuaishou Technology's advertisement and e-commerce business will look to bounce back in the second quarter of 2022 as China's GDP increases.

Kuaishou Technology's stock price went up by 16% this year, whereas the China's Internet stock prices fell by 6%. Morgan Stanley expects Kuaishou to continue increase its market share as the company outperformed its competitors. Kuaishou is expected to have a CAGR of 20% in its revenue from 2021 to 2023.

Kuaishou lags behind its competitor, Douyin, in terms of Daily Active Users (DAU). With 320 million DAU, Kuaishou will look to increase its DAU through incorporating more contents and collaborating with companies like Meituan and SF Express to roll out more services. Morgan Stanley predicts that Kuaishou Technology's balance sheet will come close to breaking even by the fourth quarter of 2022 through more efficient sales and marketing strategies.

Morgan Stanley