Kuaishou Technology (HKG: 1024) (OTCPK: KSHTY) shares are down 6% today. 1024 shares are showing the difficulty that we English speakers out here have in trading in, or speculating with, China Mainland stocks. We simply do not get the information flow in a language we understand in anything like real time. It’s possible to assume that there is some news which has brought Kuaishou shares down 6% today - but what it is is more difficult to determine. Simply because most of the information action is inside China, in Chinese. So, the information flow to us out here is fragmentary and late.
We do have some recent information: “Short video platform operator Kuaishou on Tuesday posted revenue growth of 27.9% as it took in RMB 27.74 billion ($3.8 billion) in the second quarter, as the company’s online advertising and other services showed robust growth during the period, increasing 30.4% and 61.4%, respectively. Kuaishou categorizes e-commerce under its other services. The quarter marks “the first-ever group-level net profit in a quarter since our listing in Hong Kong in 2021,” Kuaishou said in its financial report, with operating profit reaching RMB 1.3 billion, compared to a loss of RMB 3.06 billion in the June quarter last year.” The domestic business has been in profit for 5 quarters now, while the international one is still in the red. What’s happened is that the international losses have fallen to a level where they’re more than covered by the domestic profits.
Kuaishou Technology share price from Google Finance
One way to think of Kuaishou is as a competitor to TikTok. Which always produces a problem for such social media networks are ruled by network effects. Everyone’s on Facebook because everyone’s on Facebook. Everyone’s on TikTok because everyone’s on TikTok. It is possible for a new network to break through - Facebook did it to MySpace after all - but it’s difficult. It’s also possible to be the second ran but that’s not as profitable a situation of course. So much more has to be spent on trying to keep up.
As we say, there’s no specific news in English to explain this 6% fall today. Turnover in the stock is high (35 million) but given those language limitations it’s not really possible to say exactly why.
It’s exactly this information vacuum - or perhaps delay - which makes us wary of Mainland stocks. The flow of news just isn’t fast nor detailed enough to make trading in and out all that viable an option.