(Yicai Global) Aug. 24 -- The stock price of Kuaishou Technology, the main rival to TikTok’s sister app in China, sank after the short-video platform posted slower revenue growth in the second quarter compared with a year earlier.

After plunging by as much as 10.6 percent in Hong Kong this afternoon, Kuaishou’s shares [HKG: 1024] ended 8.1 percent down at HKD69.05 (USD8.80) each. The stock is 40 percent below its issue price of HKD115 in February last year.

Revenue rose 13.4 percent to CNY21.7 billion (USD3.2 billion) in the three months ended June 30, down nearly 10 percentage points from the previous quarter, the Beijing-based firm’s earnings report showed late yesterday. Revenue growth was mainly driven by gains in online marketing services and live-streaming.

“We achieved breakthrough progress despite the challenging macro environment,” said co-founder and Chief Executive Officer Cheng Yixiao. “Our revenue continued its solid growth momentum and our domestic business realized profitability at the operating level ahead of our expected schedule.”

Online marketing services jumped 10.5 percent to CNY11 billion, while live-streaming gained 19.1 percent to CNY8.6 billion, accounting for 50.7 percent and 39.5 percent of total revenue, respectively. Income from online marketing fell 3.5 percent from the first quarter, mainly because advertisers tightened their belts as the economy weakened.

Because of overseas business losses and other costs, including salaries, Kuaishou reported a net loss of CNY3.2 billion (USD466.6 million) for the period, 55 percent narrower than a year ago.

The quarter also marked the first time that the TikTok competitor’s domestic business turned a profit, and ahead of its own expectation. Profit from China was CNY93.6 million (USD13.6 million) thanks to cost structure optimization and improvements in operational efficiency.

Kuaishou continued to attract users and improve its retention rate in the quarter. Average daily active users jumped 18.5 percent to a record high 347.3 million from a year earlier, and each DAU's average daily usage time rose 17.1 percent to 125.2 minutes.

“We will continue to deepen and expand our trust-based ecosystem, further unlocking the vast potential of our public and private domain traffic,” Cheng said. “Furthermore, we are dedicated to creating more value for users, content creators, partners and shareholders and driving the company's sustainable development.”

Editors: Dou Shicong, Futura Costaglione