TikTok’s China rival is coming out of obscurity

Kuaishou Technology may be coming out of its larger rival ByteDance's long shadow. China's $50 billion short-video streaming app has been stuck in a regulatory firestorm since its February initial public offering, the shares shedding some two-thirds of their value, but signs of improvement are emerging.

After declining through the year, daily active users flew past 300 million in the third quarter. Users are spending more time browsing too. A 77% gain in advertising revenue, the top source of income, was a pleasant surprise considering that line item had dried up for privately held ByteDance, per Chinese state media citing sources who attended an internal company meeting.

Some of the lift might be temporary. Kuaishou won broadcasting rights of the Tokyo Olympics, which helped generate 73 billion clicks on related content. But a nip and tuck of its costly overseas operations is moving along nicely. Its enterprise value is trading at 2.9 times forecast sales after a rich start, per Refinitiv. That's half the ratio of smaller rival Bilibili.