KUAISHOU(1024.HK)3Q25 RESULTS：AI EMPOWERS ALL BUSINESS LINES

Core Insights - Kuaishou reported a total revenue increase of 14% YoY to RMB35.6 billion in 3Q25, with adjusted net profit growing by 26% YoY to RMB4.99 billion, driven by enhanced operating efficiency [1] - The company expects total revenue to grow by 10% YoY in 4Q25, primarily supported by online marketing and e-commerce growth [2] Revenue Breakdown - Online marketing revenue increased by 14% YoY to RMB20.1 billion, accounting for 57% of total revenue, supported by AI-enhanced ad targeting and increased ad budgets from lifestyle services [2] - Other services revenue rose by 41% YoY to RMB5.88 billion, driven by solid e-commerce performance and Kling AI contributions, with e-commerce GMV increasing by 15% YoY to RMB385 billion [2] - Live streaming revenue grew by 3% YoY to RMB9.57 billion, representing 27% of total revenue [2] AI Impact - Kling AI's revenue surpassed RMB300 million in 3Q25, with management projecting full-year revenue of approximately US$140 million (around RMB1 billion) for FY25 [3] - AI models like OneRec contributed an additional 4-5% growth in domestic online marketing service revenue [3] - The launch of OneSearch, a generative retrieval architecture, improved product matching and drove approximately 5% growth in shopping mall search order volume [3] Margin and Efficiency - Adjusted net profit margin (NPM) increased by 1.3 percentage points YoY to 14.0% in 3Q25, attributed to enhanced efficiency and operating leverage [4] - The company is leveraging AI in various operational areas, including coding, content review, and customer service, to improve efficiency [4] - Management anticipates mid-to-high double-digit percentage growth in FY25E capex due to AI investments, while remaining confident in the YoY expansion of adjusted operating profit margin (OPM) [4]