Kwai technology released its 2021 performance, and its annual operating income in 2021 was 81 billion 80 million yuan, up 38% over the same period last year. Adjusted net loss (non IFRS): 18.85 billion yuan vs. 7.864 billion yuan in 2020. The operating revenue of 21q4 company was 24.43 billion yuan, with a year-on-year increase of 35% and a month on month increase of 19%; Adjusted net loss (non IFRS) of RMB 3.57 billion vs. 20q4 net loss of RMB 459 million.
Main performance comments and Prospects
Kwai user traffic has increased steadily, enhancing content operation and social connections. 21Q4 Kwai has applied the average daily live user number to 323 million, up 19.2% over the same period. The average monthly live user data reached 578 million, a year-on-year increase of 21.5%; The average daily use time of each daily living user increased by 32.3% year-on-year to 118.9 minutes. The Kwai Fu continues to strengthen the social advantages of the private sector and enhance user interaction and participation. More abundant and accurate content was recommended. By the end of 2021, the Kwai Fu drama had been on line and had more than ten thousand short plays. Platform traffic maintained a healthy and stable growth trend.
The advertising and marketing business is growing rapidly, and the closed-loop transaction within the ecosystem is strengthened. In 2021, the revenue of online marketing services was 42.7 billion yuan, a year-on-year increase of 95.2%; The revenue of 21q4 was 13.2 billion yuan, a year-on-year increase of 55.5% and a month on month increase of 21.3%. The advertising realization efficiency has been significantly improved: in 2021, the advertising revenue per dau increased from 83 yuan to 138 yuan. The refinement of the algorithm system and the improvement of advertising operation efficiency improve the advertiser experience and advertising effect. Strengthen the coordination between advertising business and e-commerce business. Merchants and anchors can promote commodity purchase through advertising in the station, so as to realize closed-loop marketing and trading in the ecosystem.
The trust e-commerce model has been successfully promoted to provide refined supply chain support. The revenue of other e-commerce services increased by 9.91 billion yuan in 2029; The revenue of 21q4 was 2.4 billion yuan, a year-on-year increase of 40.2% and a month on month increase of 27.3%. In 2021, the total amount of platform e-commerce transactions reached 680 billion yuan, a year-on-year increase of 78.4%. The trust e-commerce model developed from the unique social attributes of the platform has achieved remarkable results. The repurchase rate of 21q4 users has increased by more than 5 percentage points to about 70% year-on-year. 21Q4 Kwai has upgraded the commodity preferred platform alliance to fast distribution, reduced the entry threshold of businesses, provided more refined anchor matching products, and more than 30% of GMV came from fast distribution.
The payment for live broadcast is increased, and the operation of content and anchor is more efficient. In 2021, the live broadcasting revenue was 31 billion yuan, a year-on-year decrease of 6.7%; The revenue of 21q4 was 8.8 billion yuan, a year-on-year increase of 11.7% and a month on month increase of 14.3%. The average monthly paying users in Q4 increased by 5.2% to 48.5 million month on month, and the monthly live arppu increased by 17.2% to 60.7 yuan year on year. In 2021, the Kwai Fu further expanded its cooperation with the association. The number of the host clubs increased by double last year, bringing more efficient operation and liquidity efficiency.
The business structure changed, the gross profit margin increased, and the sales expense rate continued to grow. The gross profit margin in 2021 was 42.0%, an increase of 1.5 percentage points year-on-year, mainly because the proportion of live broadcasting business in revenue decreased and the proportion of sharing cost in cost decreased, but the content cost and employee expenditure increased more. As the proportion of high gross profit business income such as advertising and e-commerce continues to increase and the ROI of content investment is more strictly controlled, it is expected that the follow-up gross profit margin will continue to improve. In 2021, the sales expense rate was 54.5%, with a year-on-year increase of 9.2 percentage points, mainly due to the fierce traffic competition in China and overseas business expansion. In 2022, the external competitive environment has eased, and the marketing expense rate is expected to decline.
Investment advice
Kwai's performance in 2021 exceeded market expectations, and traffic and user hours continued to grow. We believe that the short video industry will not be a single competitive form. The Kwai has built up a valuable private domain traffic ecosystem in the user's social advantages. Suggestions: 1) the growth of the company's advertising business, especially the internal circulation with e-commerce / KOL ecology; 2) With the development of credit e-commerce model, explore the huge value of private traffic; 3) The growth of overseas business users and the way of realization; 4) The expected situation of cost reduction, efficiency increase and profit and loss balance.
Major risks
Macroeconomic downturn; Weak consumption; Content supervision exceeds expectations; Data and advertising regulatory risks.
