Kuaishou posts 7 billion yuan loss in second quarter as it continues to burn cash amid regulatory crackdown
- The Beijing-based company reported quarterly revenue of US$2.95 billion, representing a 48.8 per cent year-on-year increase
- The short video platform had 293 million average daily active users on its main app, up 11.9 per cent compared with 262 million a year ago
Kuaishou Technology said its short term revenue will be affected by Beijing’s ongoing regulatory crackdown on the tech sector as the operator of China’s second largest short video-sharing platform reported worse-than-expected losses of 7.04 billion yuan (US$1.1 billion) in the second quarter.
The earnings results come at a time when the company’s share price has fallen to one-fifth of its peak in February amid a broader crash of Chinese tech stocks triggered by the tighter regulatory environment.
“In the short term, our revenue will be affected... at this point we are basically in line with the industry,” Kuaishou chief executive Su Hua said on the earnings call.
“We have maintained active and smooth communications with regulatory authorities, and have carried out compliance preparation very early in response to the bottom line and red line requirements related to business operations, including those relevant to data security,” he said.
The company reported a net loss of 7.04 billion yuan in the second quarter, missing analysts’ consensus estimates compiled by Bloomberg, which was for a net loss of 6.25 billion yuan. The latest second quarter number compares with a huge 37.6 billion yuan net loss for the same period in 2020.
Kuaishou’s shares recovered somewhat over the past week, with a more than 10 per cent gain since Friday, although the stock closed down 3.55 per cent to HK$77.5 on Wednesday, after losing more than a third of its value over the past month.