By Sherry Qin

Kuaishou Technology is scheduled to report fourth-quarter results on Tuesday. Here's what you need to know:

NET PROFIT FORECAST: The Beijing-based short-video app operator's fourth-quarter net profit likely rose 10.0% to 3.97 billion yuan, equivalent to $547.7 million, according to a poll of seven analysts by FactSet. Its adjusted net profit likely gained 6.9% to 4.66 billion yuan.

REVENUE FORECAST: Kuaishou's revenue likely gained 9.7% to 35.73 billion yuan, supported by its advertising business's strength. That should take Kuaishou's 2024 revenue to 127.24 billion yuan, up 12%.

Kuaishou's shares have risen almost 45% this year so far, buoyed by the positive sentiment over China's AI developments. Shares surged 16% in one session in early March after Chinese officials mentioned its text-to-video AI tool, Kling, during their press conference. Its stocks fell 22% in 2024 on persisting concerns about its e-commerce business amid weak consumer sentiment in China.

WHAT TO WATCH:

-- Kuaishou may need a new growth engine as its e-commerce business slows, Nomura analysts said in a recent note. China's livestreaming e-commerce industry is likely saturated after years of significant growth, as stagnating traffic growth at China's top two short-video apps, Douyin and Kuaishou, could limit their ability to grow audiences, the analysts say. Investors will look for management's comments on its livestreaming e-commerce business and its business priorities for the next year.

-- Kuaishou's text-to-video tool Kling ranked high globally among video generation models, with decent enterprise momentum. Citi analysts think there is attractive potential in this segment due to widespread online video consumption, rising advertisers' demand as well as long-term demand potential from drama and gaming producers.

-- Investors should look for management's 2025 gross merchandise value guidance, a measure of total goods sold. Citi projects 2025 GMV growth at low teens with stable take rates on ads and commission revenue but sees some uncertainty brought by persistent macro softness and competition.

Write to Sherry Qin at sherry.qin@wsj.com

(END) Dow Jones Newswires

March 21, 2025 00:09 ET (04:09 GMT)

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