(Yicai Global) May 25 -- Kuaishou Technology’s stock price gained after China’s second-biggest short-video platform reported higher revenue and a much smaller loss in the first quarter of the year.

Kuaishou’s shares [HKG: 1024] jumped 5.6 percent to close at HKD66.90 (USD8.52) each today. The broader Hong Kong market added 0.6 percent.

In the three months ended March 31, revenue rose 24 percent from a year earlier to CNY21.1 billion (USD3.2 billion), the Beijing-based firm’s earnings report showed late yesterday. Its net loss loss narrowed 89 percent to CNY6.25 billion (USD937 million).

Income from online marketing services jumped 33 percent to CNY11.4 billion, while that from livestreaming services rose 8.2 percent to CNY7.8 billion. Revenue from other businesses, mainly e-commerce, soared 55 percent to CNY1.9 billion.

But on an earnings conference call with investors, co-founder and Chief Executive Cheng Yixiao said year-on-year growth from various revenue streams had slowed since then. Since mid-March, the re-emergence of Covid-19 in China and related containment restrictions have brought more uncertainty to the economy, resulting in tighter budgets at advertisers and slower advertising revenue growth, he said.

Kuaishou’s advertising business has not seen a clear recovery trend yet, Chen added, noting that he believed the platform’s high connectivity with users and consumers will accelerate the rebound in its advertising business once the economic situation improves.

The Covid outbreaks hit the company’s e-commerce business hard, as more than half of its merchants are based in affected regions, Cheng said. Shanghai and neighboring Jiangsu and Zhejiang provinces are hubs for the makers and vendors of chic clothing and shoes, while northern and northeastern China is where most of Kuaishou’s active e-commerce clients live.

Though Kuaishou’s users remain relatively willing to buy, the logistics and warehousing of its e-commerce business have been upended by Covid restrictions, Cheng noted. But with the virus’ effective control in some regions, Kuaishou’s e-commerce performance has been gradually improving since late last month.

The platform had an average of 346 million daily active users in the first quarter, up 17 percent from a year earlier. Average monthly active users surged 15 percent to 598 million. Total user traffic surged over 50 percent, the financial report showed.

Editors: Tang Shihua, Futura Costaglione