Kuaishou cuts losses by 34pc as NetEase profit edges up

Chinese tech firms Kuaishou Technology (1024) and NetEase (9999) both posted better-than-expected results for the first quarter.

Kuaishou, China's No.2 short-video platform, narrowed its adjusted net loss by 34.1 percent year-on-year to 3.72 billion yuan (HK$4.38 billion) defying a weakening economy and competition with TikTok-owner ByteDance.

Revenue rose to 21.07 billion yuan for the three months ended March, also beating the 20.6 billion yuan projected by analysts. Growth decelerated to the slowest pace since the company went public in February last year.

Sales of online marketing services grew by 32.6 percent to 11.4 billion yuan and that of live streaming advanced by 8.2 percent to 7.8 billion yuan from a year earlier.

In the wake of stricter rules on content and spending, the company is moving away from generating revenue from live-stream tips to more lucrative businesses like e-commerce, advertising, and game publishing.

This month, Kuaishou unveiled plans to provide more traffic to over 500 selected merchants who will be licensed to sell products like cosmetics and clothes under the official "Kuai" brand.

It denied a rumor a day before the earnings report that its chairman Su Hua is under police investigation and said it has reported the case to the police.

Meanwhile, NetEase said its first-quarter adjusted net profit edged up by 0.7 percent to 5.11 billion yuan from a year ago.

Net revenue for the period increased by 14.8 percent to 23.6 billion yuan, of which, online game services net revenue climbed by 15.3 percent to 17.3 billion yuan, it said in a filing yesterday.

The gross profit margin for games inched up by 0.5 percentage points to 65.1 percent, fluctuating within a narrow band based on the revenue mix of mobile and PC games, as well as self-developed and licensed games.

Its music arm Cloud Village's (9899) loss narrowed by 89.2 percent to 180 million yuan while revenue soared by 38.6 percent to 2.1 billion yuan.

Separately, WPS Office developer Kingsoft (3888) saw its March-quarter net profit slide by 15 percent to 99.4 million yuan compared to the same period of 2021.

Sales surged by 19 percent to 1.85 billion yuan, including 871.1 million yuan from the office software and services business, which went up by 13 percent from a year ago.

Online games and other businesses generated 981.9 million yuan in sales, up by 25 percent, mainly due to the launch of several mobile games and partially offset by decreased revenue from existing games, it said in a filing.