GUOTAI HAITONG SECURITIES·2026-01-26 02:27Investment Rating - The report assigns an "Accumulate" rating to Kuaishou-W with a target price of 104 HKD, based on a valuation of 15x PE for traditional business and 30x PS for Kuaishou's AI video model [2][11]. Core Insights - The report highlights the acceleration of AIGC (AI Generated Content) video commercialization, emphasizing Kuaishou's ability to integrate technology, ecosystem, and monetization to unlock long-term value [1][11]. - Kuaishou's revenue is projected to grow from 142 billion RMB in 2025 to 170 billion RMB by 2027, with adjusted net profit expected to increase from 20.6 billion RMB to 28.1 billion RMB during the same period [5][11]. - The global video streaming revenue is anticipated to reach 214.6 billion USD in 2025, with AI video penetration expected to contribute significantly to the total addressable market (TAM) of approximately 25 billion USD [27][11]. Summary by Sections 1. AIGC Video Generation Technology - AIGC is transitioning from a creative tool to a core productivity driver in the content industry, supported by advancements in deep learning and multimodal models [13][15]. - The demand for efficient content supply in industries like media, e-commerce, and advertising is driving the adoption of AIGC technologies [15][23]. 2. Competitive Landscape - The AIGC video generation market is entering a phase of differentiation among general models, vertical capabilities, and platform ecosystems [34][36]. - Kuaishou's Kling 2.5 Turbo ranks highly in performance and cost-effectiveness compared to competitors, showcasing its advantages in integrated audio-visual generation and understanding of the Chinese context [34][36]. 3. Kuaishou's Value Creation - Kuaishou has established a closed loop of technology, ecosystem, and monetization, with significant revenue growth from its AI video model, which reached an annualized revenue run rate of 240 million USD by December 2025 [11][44]. - The report notes that Kuaishou's AI model has generated over 600 million videos and collaborated with more than 30,000 enterprise users, indicating strong commercial potential [11][44]. 4. Financial Projections and Valuation - Kuaishou's financial forecasts indicate a steady revenue growth trajectory, with adjusted net profit expected to grow at a compound annual growth rate (CAGR) of 16% from 2025 to 2027 [5][11]. - The report suggests a conservative valuation approach, applying a 15x PE for traditional business and a 30x PS for the AI segment, reflecting the company's growth potential in the AIGC space [11][11].