Beijing, China – The stock of Kuaishou Technology is under scrutiny following the 618 e-commerce festival. Analysts are assessing the company’s growth potential amidst uncertainties in short-term revenue projections. Kuaishou, known as China’s second-largest player in online advertising, faces challenges in the aftermath of the recent shopping event.

Despite a +28% year-over-year growth in e-commerce GMV for the first quarter of 2024, Kuaishou recorded modest expansion during the 618 shopping festival. Competitors like Douyin outperformed Kuaishou in GMV increase, signaling potential hurdles for the company’s revenue growth in the near term. Lower subsidies and normalization of discounts were cited as factors affecting Kuaishou’s performance, leading analysts to revise down revenue projections for the fiscal year 2024.

In the long term, Kuaishou stands to benefit from the shift towards online advertising, particularly in the short-form video segment. Short-form videos have been gaining market share in China’s internet advertising industry, with projections suggesting further growth in the coming years. As the country’s second-largest short video app, Kuaishou is well-positioned to capitalize on this trend and potentially increase its market share over time.

While short-term uncertainties persist, Kuaishou’s long-term growth potential remains promising. With a consensus full-year FY 2024 revenue forecast indicating slower growth compared to previous years, analysts believe that a Hold rating is appropriate for the stock. The company’s normalized P/E ratio also suggests fair valuation, providing investors with a balanced perspective on Kuaishou’s investment prospects.