(Yicai Global) March 30 -- Kuaishou Technology’s shares headed south after a report said China is planning new curbs on the live-streaming sector, and despite the country’s second-largest short video platform saying its annual loss was pared by a third last year and the company looked forward to turning a quarterly profit this year.

Beijing-based Kuaishou [HKG: 1024] closed 6.2 percent lower in Hong Kong today at HKD73.60 (USD9.40), recovering from a plunge of as much as 8.3 percent.

China is planning new curbs on its USD30 billion live-streaming sector, the Wall Street Journal said yesterday, citing unidentified sources familiar with the matter. Chinese regulators are drawing up new rules to limit how much internet users can tip each day and are considering to set a daily cap on how much live-streamers can collect from fans, the WSJ said.

Addressing tightening regulation of the sector, Chief Executive Cheng Yixiao said on a conference call after Kuaishou’s earnings report came out yesterday that leading platforms should have benign interactions with regulatory authorities to improve systems and rules to ensure the orderly, healthy, and sustainable development of live-streaming e-commerce.

“We have always been committed to strengthening e-commerce infrastructure and platform governance to enhance the users' consumption experience and their trust in the platform,” he said.

Kuaishou’s earnings report showed that its net loss shrank 33 percent to CNY78.1 billion (USD12.3 billion) in the year ended Dec. 31. Revenue jumped 38 percent to CNY81.1 billion, buoyed by higher income from online marketing and e-commerce.

Looking forward, Cheng said Kuaishou was “very confident that our domestic business will deliver a quarterly adjusted net profit within 2022.”

The company will strive to continue delivering results, control expenses, and optimize the management of personnel productivity and unit spending efficiency, he said.

Last year, the firm’s income from online marketing services soared 95 percent to CNY42.7 billion, buoyed by user traffic growth and an increasing number of advertisers. E-commerce gross merchandise volume was CNY680 billion, up 78 percent, with closed-loop e-commerce marketplace Kuai Shop contributing to 99 percent of total GMV.

Revenue from the live-streaming business dropped 6.7 percent to CNY31 billion, as Covid-19 was contained and people returned to normal life, spending less time on online social and entertainment activities.

In the fourth quarter of 2021, the net loss narrowed 68 percent from a year earlier to CNY6.2 billion (USD975 million). Revenue jumped 35 percent to CNY24.4 billion, with users and traffic growth soaring to new records.

Revenue from online marketing climbed 56 percent to CNY13.2 billion in the three months, while that from live-streaming rose 14 percent to CNY8.8 billion.

Average daily active users and monthly active users rose 19 percent and 22 percent to 323.3 million and 578 million, respectively. The average time a daily active user spent per day on the platform grew 32 percent to 118.9 minutes.

Editor: Futura Costaglione