(Yicai Global) March 24 -- Kuaishou Technology’s share price plunged 12.2 percent today after the operator of the Chinese short video platform ran up losses of CNY7.95 billion (USD1.2 billion) last year despite a 50 percent jump in revenue, according to its latest financial report.

Kuaishou’s stock price [HKG:1024] closed at HKD265 (USD34.11).

The staggering loss is a marked reversal of fortune from the profit of CNY1.03 billion (USD158 million) made in 2019, the Beijing-based firm said yesterday in its first earnings report since listing on the Hong Kong bourse last month.

Most of the deficit can be put down to much higher marketing expenses which vaulted over two-and-a-half times year on year to CNY26.6 billion (USD4 billion), nearly half the year’s revenue, it said.

The increased spend on advertising did pump up user numbers. Daily active users jumped 50.7 percent in 2020 from the year before to 260 million, while monthly active users surged 45.6 percent to 481 million.

Despite the dismal bottom line, the company’s revenue shot up 50.2 percent year on year to CNY58.8 billion (USD9 billion) largely due to a tripling of earnings from its online marketing services to CNY21.9 billion. In the fourth quarter last year e-marketing revenue outstripped its live broadcast business for the first time.

E-commerce turnover also increased six-fold from 2019 to CNY381.2 billion (USD58.5 billion) and the average repeat purchase rate rose to 65 percent from 45 percent. This helped boost its ‘other services’ revenue, which includes e-retail, to CNY3.7 billion from CNY260 million in 2019. Revenue from live broadcasts rose 5.6 percent to CNY33.2 billion.

Editor: Kim Taylor