Kuaishou is truly profitable for the first time; 7 years later, Arm files again to go public

Original link: https://www.latepost.com/news/dj_detail?id=1822

Kuaishou is truly profitable for the first time

When the quarterly report was released, Kuaishou announced for the first time that it had achieved net profit at the group level—that is, the impact of equity incentive expenses and investment gains and losses was removed. After another quarter, Kuaishou no longer needs to “remove” anything extra. Based on the International Financial Reporting Standards, they made a net profit of 1.481 billion yuan, the first real profit since listing.

  • Revenue was 27.744 billion yuan, a year-on-year increase of 27.88%. Among them, the growth rate of online sales service revenue was 30.36%, and the growth rate of “other revenue” mainly based on e-commerce was 61.44%;
  • Gross profit was 13.934 billion yuan, a growth rate of 42.62%, and both scale and gross profit margin increased year-on-year. Gross profit margin rose above 50% for the first time;
  • Sales, research and development, and administrative expenses decreased year-on-year, and the proportion of the three expenditures in revenue fell to 45.91%, a significant decrease of nearly 25 percentage points year-on-year;
  • Net profit was 1.481 billion yuan, a net loss of 3.176 billion yuan in the same period last year, and a net loss of 876 million yuan in the first quarter of this year;

While reducing costs and controlling expenses and making overall profits, Kuaishou DAU and MAU also increased year-on-year, and e-commerce GMV rose to 265.456 billion yuan, outperforming the national social retail market. After correctly understanding the competitive relationship with Douyin, Kuaishou put its resources and attention on markets and regions that are more suitable for it, and outperformed the market in stages.


The big promotion of e-commerce in the quarter is one of the performance catalysts. In terms of e-commerce business, according to the Kuaishou battle report, the number of e-commerce orders and the number of buyers increased by about 40% and 30% year-on-year, and the total transaction volume of branded goods increased by more than 200% year-on-year. Internal circulation advertisements (e-commerce merchants and anchors who carry out live streaming on Kuaishou to get more exposure) helped to achieve a growth rate higher than the growth rate of GMV (38.86%).

The year-on-year growth rate of external circulation advertising revenue (advertisers directly placing brand advertisements and performance advertisements on Kuaishou) is another positive factor. Cheng Yixiao, CEO of Kuaishou, said at the performance meeting that the investment in platforms such as e-commerce, media, information, medical care, education, and training is on the rise month-on-month. After the superposition of internal and external cycles, the growth rate of Kuaishou advertising is higher than that of Baidu, which has a similar scale in the same period, which more or less reflects the priority of current advertisers when they want to reach potential consumers.

The management expects that the growth in the second half of the year may mainly come from games, especially the procedural games that have sprung up last year. “Recently, game manufacturers have launched more new products. Customers in the game industry have clear demands for summer traffic. Kuaishou has a large number of young users in third- and fourth-tier cities who have not been reached by traditional channels.” Cheng Yixiao said. He also predicts that short dramas will have better growth opportunities during the summer with abundant traffic. Afterwards, the big promotion of the comprehensive e-commerce platform may also have a better pull.

A week before the release of the quarterly report, the anchor “Erlu” with more than 40 million followers on Kuaishou was permanently banned by Kuaishou after being notified by the public security department of the place where the incident happened. Nearly three years after the opening of the public domain traffic pool, the impact of this incident on Kuaishou is far less than that of another major anchor “Simba” and the openness of platform conflicts.

The management also cited some indicators to illustrate the health of the platform’s activity. For example, as of the end of the second quarter, the cumulative number of cross-connected user pairs exceeded 31.1 billion, a year-on-year increase of nearly 50%. The average daily interaction on the platform in a single quarter is 8 billion times. (Gong Fangyi)

After 7 years, Arm files again to go public

On August 21 local time, Arm, a chip IP company owned by Softbank, submitted an application for listing to the US Securities and Exchange Commission and plans to list on Nasdaq. Although Arm has not yet announced the size of the fundraising, the market is expected to be between $8 billion and $10 billion, making it the largest technology IPO of the year and the third largest technology IPO in history (the first two are Alibaba and Facebook).

Arm is a software company that provides architecture and instruction sets for chip design. There are two main sources of income: licensing and royalties. The license is charged according to the number of IP authorizations and is paid in one time; the royalty is charged according to the value of the final chip produced, and the fee is linked to the sales volume, accounting for the bulk of Arm’s revenue.

Arm shipped more than 30.5 billion chips in the fiscal year ended March. According to the prospectus, about half of the world’s chips, 70% of people and 99% of smartphones are currently using Arm technology.

The advantage of doing this kind of upstream business is that it is not subject to the cyclical changes of a single industry and low marginal costs. Even as the global smartphone market slumps, Arm’s revenue fell just 2.5% in the most recent quarter. In addition, because he is not responsible for production, does not have any heavy asset investment, and has a long product life cycle and can be reused continuously, Arm’s gross profit rate reaches an astonishing 96%.

The disadvantage is that the scale ceiling is also very limited, and the largest revenue in a year did not exceed 3 billion U.S. dollars, which is a fraction of chip giants such as TSMC, Nvidia, Intel, and Qualcomm.

This is the first time Arm has applied for listing again after seven years.

Softbank bought Arm for $32 billion at a premium of 43% in September 2016, and promoted its privatization and delisting. In order to make enough cash, Softbank also reduced some of its Alibaba shares. Sun Zhengyi thought that Arm would be an exponentially growing technology giant, but the subsequent development did not go as well as he expected.

For Softbank, which is struggling with losses, the listing of Arm can help it recover quickly. SoftBank’s Vision Fund, which is responsible for technology investments (currently owns 25% of Arm), lost a record nearly $40 billion in its most recent fiscal year. The current valuation of Arm’s $60 billion is nearly double that of SoftBank’s original purchase price.

SoftBank would have had a chance to earn even more. In September 2020, Nvidia proposed to acquire Arm for about US$40 billion, but it was strongly opposed by regulators and other competitors, and the deal eventually fell through. The acquisition offer at the time included some cash and about $25 billion worth of Nvidia stock. As Nvidia’s stock price soared, the value of these shares has now reached about $93 billion, far exceeding Arm’s own valuation. (Qiu Hao)

When user growth stops, what does Zoom rely on to make more profits

According to Zoom’s latest second quarter report, this technology company, which has grown rapidly during the epidemic, has a low debt ratio that countless CEOs envy. They have $6.03 billion in cash and cash equivalents lying in their accounts, while dues to suppliers and owed to banks add up to less than $100 million.

But the capital market is not too concerned about this. They want to know how Zoom will continue to grow after the epidemic. Previously, in response to the decline in revenue, the company laid off 1,300 employees in February this year, accounting for about 15% of the total number of employees.

At the performance meeting, Yuan Zheng, founder and CEO of Zoom, started by thanking corporate customers: “I am very happy that the apartment operator Brookdale uses our latest Zoom Phone product”, “Thanks Perdue Farm for using our Zoom Meetings”, “Thank you American grocery store Dollar General chose us”.

  • Total revenue was US$1.14 billion, a year-on-year increase of 3.6%;
  • Among them, corporate customer revenue was US$660 million, a year-on-year increase of 10.2%, accounting for 58% of total revenue, higher than 54% a year ago;
  • Gross profit margin was 80.3%, an improvement from 78.9% in the second quarter of last year;
  • Operating profit was US$178 million, a year-on-year increase of 45.9%;
  • It raised its full-year revenue forecast to between US$4.49 billion and US$4.50 billion, higher than the previous forecast of US$4.47 billion.

Despite the near-zero growth in total revenue, the number of corporate customers is still growing. In the second quarter, it increased by 7% year-on-year to 218,100, showing positive growth for 15 consecutive quarters.

On the premium side, customers are buying more of Zoom’s services. There were 3,672 businesses that contributed more than $100,000 in revenue in the last 12 months, an 18% increase year-over-year. These high-end customers accounted for 29% of total revenue, an increase of 3 points compared to the same period last year.

Through continuous buying, buying, and buying, Zoom is trying to transform from an “online meeting company” to an all-in-one office platform. It helped improve Zoom’s self-service and chat features through its acquisition last year of conversational AI platform Solvvy. In April of this year, it acquired Workvivo, an internal communication platform for employees, and integrated its internal communication functions into Zoom.

Compared with similar software, another advantage of Zoom is that it was widely used in teaching during the epidemic. College students have become accustomed to using Zoom, so that many students claim to have graduated from Zoom University during the epidemic. After Yuan Zheng mentioned the epidemic in the first quarter financial report, many universities still purchased more Zoom services, “Virginia Tech has newly deployed 10,000 Zoom Phone services.” This service allows users to go from phone to meeting mode with one touch.

When asked by analysts how to use generative artificial intelligence (GenAI) to make money, Yuan Zheng said that he will not “crazy charge” for new AI functions like competitors, because it is unfair to users. It hopes to use GenAI to improve the core meeting experience and increase user stickiness. (Intern Lin Hongsheng)

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US Secretary of Commerce Raimondo will visit China.

According to the website of the Ministry of Commerce, at the invitation of Chinese Minister of Commerce Wang Wentao, US Secretary of Commerce Gina Raimondo will visit China from August 27 to 30.

Baidu’s revenue growth rate has returned to double digits, saying that the recovery trend of advertising is significant.

In the second quarter, Baidu Group achieved revenue of 34.056 billion yuan, a year-on-year increase of 14.87%, the first double-digit growth since the third quarter of 2021. Baidu’s core revenue increased by 14.02% (26.4 billion yuan), of which online marketing revenue was 19.6 billion yuan, a year-on-year increase of 15%. Robin Li, chairman of Baidu, said at the performance meeting that current e-commerce customers still contribute the most advertising revenue, and more merchants recognize the value of Baidu. “For our online marketing business, this is a very obvious recovery trend.”

Many places require statistics on the government’s arrears to private housing companies.

According to a report from the Economic Observer.com, Zhengzhou, Tianjin and other places require district and county governments to make statistics on the arrears owed to private real estate companies. The regional leaders of several real estate companies revealed that the arrears of the city government where they are located range from 1 billion to 2 billion yuan, mainly including the promised return of land transfer fees, land increase tax rebates, resettlement housing construction deposits, and advance payments for first-level land consolidation. wait. Before the real estate enterprise officially obtains the development plot, it undertakes the government’s contract to dismantle buildings, land demolition and leveling, etc., which is generally called the first-level land consolidation advance payment.

The national average mortgage interest rate for the first and second homes dropped to a near 10-year low.

According to the Shell Research Institute, in August, the average interest rate of the first mainstream mortgage in Baicheng was 3.9%, and that of the second mortgage was 4.81%. During the same period, the average lending cycle of banks was 21 days, 1 day shorter than the previous month, the fastest since 2019. According to Wind data, as of May this year, the average mortgage interest rate for the first and second homes in the country has dropped to the lowest point since records began in 2014.


The expansion of stores at home and abroad was smooth, and the revenue of MINISO reached a new high in the second quarter.

In the second quarter of this year, the revenue of MINISO increased by more than 40% year-on-year to 3.252 billion yuan, setting a new quarterly high. The main driving force for revenue growth comes from the continuous expansion of stores at home and abroad. As of June 30, MINISO has 5,791 global stores, nearly 40% of which are located overseas. In the second quarter, 221 new stores were opened in the Chinese market, and the company plans to open 5,000 stores in China by 2027. MINISO CEO Ye Guofu said at the earnings conference call that the goal for the European and American markets is to have one store for every 100,000 people.

Michelle Ice City has opened nearly 10,000 new stores in the past year and a half.

According to Xinhua News Agency, Michelle Ice City currently has more than 32,000 stores worldwide, including over 3,100 overseas stores, covering 11 countries including Indonesia, Singapore, Thailand, South Korea, Japan, and Australia. According to the prospectus of Michelle Ice City, as of the end of March last year, there were a total of 22,276 stores, which means that nearly 10,000 stores have been newly opened in the past year and a half.

Due to heavy losses, bus fares in Lanzhou New District will increase from September.

Lanzhou New District has recently clarified that local bus prices will be officially increased from September 1st, regional bus 2 yuan/ticket, urban and rural bus: 3 yuan/ticket for lines within 15km (inclusive), 4 yuan/ticket for lines between 15km and 20km (inclusive), 5 yuan/ticket for routes over 20km. Previously, the price was RMB 1 per ticket for regional buses and RMB 2 per ticket for urban and rural buses.

According to the announcement issued by the Lanzhou New Area Management Committee last month, in the past three years (2020 to 2022), the operating cost per person of the Lanzhou New Area bus company was 9.1 yuan, minus the single person income of 2.01 yuan and the government subsidy of 1.71 yuan. The second loss was 5.38 yuan.

In September last year, Tianmu News reported the high debt dilemma of Lanzhou Public Transport Group. At that time, because it could not pay wages and the debt was too high to apply for a loan, Lanzhou Public Transport Group had notified employees to apply for a loan from the bank for salary settlement. The company shall assume joint and several liability and repay the deposit and interest. The difficulties encountered by public transportation in Lanzhou are not isolated cases. Previously, bus companies in Heilongjiang Mohe, Liaoning Jianchang, Shaanxi Dingbian, and Henan Shangqiu had all announced suspension of operation due to serious losses.

Rolex has become the watch brand most missed by thieves.

As the price of second-hand watches soared, related crimes also increased. According to The Watch Register, 6,815 watches were registered as stolen or missing last year, an increase of 60% year-on-year. Currently, there are 80,000 registered stolen or missing watches, of which 44% are Rolex, followed by Omega and Breitling. Thanks in part to social media hype, thieves are increasingly aware of which watches are worth more. According to the London police, the average price of stolen watches in the local area last year was 9,000 pounds, double that of a few years ago.

Subway is close to selling for $9.6 billion.

According to media reports, negotiations to sell sandwich chain Subway (Subway) are nearing completion, and private equity firm Roark Capital is currently leading the offer with an offer of about $9.6 billion. Due to the poor management of the domestic market, Subway reported at the beginning of this year that it was considering a sale.

Subway is the eighth-largest U.S. restaurant chain, with sales of $9.8 billion in the market last year, according to market research firm Technomic, and now has about 37,000 locations worldwide. Due to fierce competition in the local market, Subway has gradually reduced the size of its domestic stores, but is still expanding overseas. In the next 20 years, they plan to open nearly 4,000 stores in China.

The shortage of pilots is too large, and the salaries of active pilots of American Airlines (AA) have increased by more than 46%.

American Airlines recently reached a new collective bargaining agreement with 15,000 pilots. Under the new contract, the pilot’s salary will increase by at least 46%. Last month, another airline, United Airlines, also reached a new agreement with pilots, with salary increases of 34.5% to 40.2%. The sharp rise in pilot compensation reflects the weakening bargaining power of airlines when faced with a labor shortage. Investment bank Jefferies estimates that there is currently a shortfall of about 10,000 pilots in the U.S. aviation industry, and the gap between supply and demand will continue until 2027.

Due to the low base caused by asset impairment last year, the profit of BlueFocus in the first half of the year increased by 33 times.

In the first half of this year, BlueFocus’ revenue increased by 31.6% year-on-year to 22 billion yuan, of which the overseas business revenue increased by 32.6% year-on-year to 15.9 billion yuan. During the same period, net profit increased by 33 times, mainly due to the low base caused by the sharp reduction in investment income and asset impairment last year, and the net profit after deducting non-net profit increased by 10% year-on-year to 262 million yuan. According to reports, more than 70% of the company’s customers have used generative AI-related services, and about 20% have brought certain income.

The US Department of Commerce removed 27 Chinese entities from the “unverified list”.

On August 21, the U.S. Department of Commerce stated that it removed 27 entities in China from the “Unverified List”, including Hunan University, Nanchang University, Beijing Puke Measurement and Control, and Guangdong Guanghua Technology. The list is a transitional “waiting list”, and companies on the list can still trade with US companies. For companies included in the “Entity List (Entity List)”, any business transactions with the United States must be approved by the US Department of Commerce.

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