Hua Er Jie Jian Wen·2025-08-22 10:48Core Viewpoint - After more than two years of the AI model wave, AI application companies are beginning to see significant returns on their investments, with Kuaishou being a notable example as it announces its first special dividend driven by strong AI performance [2][10]. Financial Performance - Kuaishou reported a revenue increase of 13.1% year-on-year to 35 billion RMB in Q2 2025, marking the highest revenue growth rate in five quarters [2][3]. - Adjusted net profit grew by 20.1% year-on-year to 5.6 billion RMB, reaching a historical high [2][3]. - Gross margin and adjusted net profit margin both reached historical peaks at 55.7% and 16%, respectively [3]. AI Contribution - AI has been identified as the primary driver behind Kuaishou's better-than-expected performance, with significant improvements in internal efficiency and value creation in content and commercial ecosystems [4]. - The AI video generation platform, Keling AI, generated over 250 million RMB in revenue in Q2 2025, showcasing rapid commercialization growth [4][5]. Keling AI Development - Since its launch in June 2022, Keling AI has produced over 200 million videos and 400 million images, serving over 20,000 enterprise clients [5]. - Kuaishou plans to double Keling AI's revenue for the full year 2025 compared to initial targets, indicating strong confidence in its long-term investment in AI [6]. User Engagement - Kuaishou achieved record high traffic in Q2 2025, with average daily active users reaching 409 million, a 3.4% year-on-year increase, and average monthly active users at 715 million, up 3.3% [8]. Marketing Services - Online marketing services revenue reached 19.8 billion RMB in Q2 2025, a year-on-year increase of 12.8%, accounting for approximately 56.4% of total revenue [9]. - AI has played a crucial role in enhancing marketing services, optimizing solutions, and generating marketing materials [9]. Market Outlook - Morgan Stanley has raised Kuaishou's target price from 71 HKD to 88 HKD, indicating a 22% upside potential, while Huatai Securities set a target price of 85.28 HKD, citing Keling's potential for future revenue growth [10][11]. - Kuaishou's stock price has risen over 80% year-to-date, closing at approximately 74.9 HKD as of August 22 [12].