KUAISHOU(HK:01024) Orient Securities·2025-04-18 13:54Investment Rating - The report maintains a "Buy" rating for the company, with a target price of HKD 77.61 per share based on a 16x PE valuation for 2025 [2][6]. Core Views - The report highlights the successful launch of the Kuaishou Keling 2.0 model, which is expected to empower various industries such as advertising, UGC, and film creativity [1][4]. - The company has shown significant growth in its AI capabilities, with a user base exceeding 22 million and a monthly active user (MAU) growth of over 25 times since the launch of Keling AI [4]. - The Keling 2.0 model has improved semantic response capabilities, dynamic quality, and visual aesthetics, positioning the company as a leader in the global video generation market [4]. Financial Forecast and Investment Recommendations - The adjusted net profit forecast for the company is projected to be CNY 177 billion, CNY 194 billion, and CNY 229 billion for the years 2024, 2025, and 2026 respectively [2][5]. - The company's revenue is expected to grow from CNY 113.47 billion in 2023 to CNY 153.30 billion in 2026, reflecting a compound annual growth rate (CAGR) of approximately 11.1% [5][8]. - The report anticipates a gross margin improvement from 50.6% in 2023 to 56.2% in 2026, indicating enhanced operational efficiency [5][8]. Valuation Metrics - The report uses a PE valuation method, maintaining a 16x PE for 2025, leading to a reasonable valuation of CNY 3,107 billion or HKD 3,345 billion [6][7]. - The company's earnings per share (EPS) is projected to increase from CNY 1.48 in 2023 to CNY 4.96 in 2026, demonstrating strong earnings growth potential [5][8].