12 February 2026 | 9:30PM HKT Equity Research Kuaishou Technology (1024.HK) Key debates on Kling vs. Seedance, tax overhang and 2026 growth; Buy 1024.HK 12m Price Target: HK$87.00 Price: HK$69.55 Upside: 25.1% We dissect the key investor debates on Kuaishou that have come up in our conversations over the past 2 months around its Kling AI's potential and competition vs. peers (Seedance 2.0 etc.), various tax related issues and a potential tax overhang in 2026 ("traffic acquisition tax", "eCommerce related ta ...

Earnings and forecasts change: Considering above factors and our latest estimates of Kling, we cut our FY2026- 27E total forecasts by 2% due to 2-3% of streaming and ad cut, partially offsetting by increasing revenue contribution from Kling AI. Our 6-7% adj EPS cut reflects our increasing AI-related expenses but we deem it will be manageable to maintain Kling leading position. 机构：中银国际 研究员：Raphael CHEN/Dolores Tang We model an inline 4Q25 with +10% YoY topline and RMB5.4bn adj. net profit. Despite N-T pressu ...

中信证券财富管理(香港) 产品及投资方案部 中国互联网行业 电话：(852) 2237 9250 / 电邮：wminvestmentsolutions@citics.com.hk Kling AI 持续快速迭代 本文是由投资/产品专员而非分析师撰写的文章汇编。 它不构成研究报告，也不应被解释为研究报告，也不旨在提供 专业、投资或任何其他类型的建议或推荐。 CSIWM 个股点评 2026 年 2 月 4 日 快手 本文内容由 Kylie Kwok (郭凯欣) 提供 摘要 中信证券财富管理与中信里昂研究观点一致。根据中信里昂研究在 2026 年 2 月 3 日发布的题为《Kling AI continues rapid iterations》的报告，分析预计快手在 2025 年四季度总营收及调整后净利润将分别实现增长，Kling AI 收入可能 继续超预期增长。Kling APP 通过新型社交玩法 Control Motion 获得用户青睐，并升级了 Kling 2.6 Turbo 的视频与音 频整合生成功能。Kling 在成本效率方面的显著优势，其作为前三强生成式视频平台的行业地位，用户与收入增长势 头有望持续 ...

Core Insights - Kuaishou Technology's AI video-generation tool has surpassed 12 million monthly active users, indicating strong user engagement and adoption in the market [1] Company Summary - The growth of Kuaishou's AI video-generation tool reflects a broader trend among Chinese tech companies investing in artificial intelligence [1]

Group 1 - Kling AI's paid performance in overseas markets is increasing, driven by its "one-click generation" feature that significantly lowers the creation barrier [1] - Wanxing Technology's AI product, Wanxing Tianmu AI, is gaining attention as a representative of full-chain audio and video creation, efficiently adapting to high-quality computing power and supporting the generation of coherent videos over 60 seconds [1] - According to Frost & Sullivan, the average cost for users to generate a 5-second 1080P video segment using Wanxing Technology's model is among the lowest in the industry [1] Group 2 - Kling AI leverages the Kuaishou content platform and traffic marketing ecosystem to quickly meet consumer demands through continuous iteration of gameplay and experience [2] - Wanxing Tianmu AI serves both C-end individual creators, represented by short video creators, and B-end enterprise users, and can synergize with other products from Wanxing Technology [2] - The rise of AIGC audio and video creation applications, exemplified by Kling AI and Wanxing Tianmu AI, is becoming a new generation of creative productivity platforms accepted by global creators, showcasing the immense potential of AI in empowering creative production [2]

Kuaishou Technology (1024.HK) Conference Call Summary Company Overview - **Company**: Kuaishou Technology - **Ticker**: 1024.HK - **Industry**: AI Video Generation Key Points Industry Dynamics - The AI video generation industry is in its early stages, with a Total Addressable Market (TAM) projected to grow from **US$1 billion in 2025** to **US$39 billion by 2033**, representing a **56% CAGR** [6][15] - The Professional (2P) segment of the TAM is expected to expand from **US$700 million in 2025** to **US$17 billion by 2033**, with a **49% CAGR** [6][15] - The Business (2B) segment is anticipated to grow from **US$400 million in 2025** to **US$22 billion by 2033**, outpacing the Professional segment with a **66% CAGR** [6][15] Company Performance - Kuaishou's share price increased by **11%** on January 5, 2026, attributed to the strong performance of the Kling AI model and positive sentiment towards AI applications [1] - Revenue forecasts for Kuaishou are now **US$140 million+ for 2025** and **US$230-240 million for 2026**, with potential upside due to the popularity of the Kling AI 2.6 Motion Control feature [7][16] - The current share price implies a **10X PE** for Kuaishou's main platform and **25X P/S** for Kling, suggesting a valuation of **US$5-6 billion** [7][21] User Adoption and Growth - Kling AI has seen a significant increase in user engagement, with daily grossing rising **113%** from December 27, 2025, to January 3, 2026, and weekly grossing increasing **64%** [2] - The Motion Control feature of Kling AI has gone viral, particularly in markets like Korea and the US, contributing to its rapid growth [2][5] Competitive Positioning - Positive user feedback highlights Kling AI's realistic motion and lifelike facial expressions, positioning it favorably against competitors like Runway [5] - Despite a **60%+ increase in pricing** for the new models compared to previous versions, Kling AI remains competitive against overseas peers [5][20] Future Outlook - Upcoming releases of new functions and versions of video models are expected to enhance production efficiency and broaden use cases [8] - Enterprise clients now account for **40% of Kling's revenue**, indicating a growing demand for professional video usage [8] Risks and Considerations - Key downside risks include slower-than-expected recovery in advertising budgets, weaker monetization of Kling, and lower profitability [24] - The company maintains a **Buy** rating with a 12-month price target of **HK$83**, indicating a potential upside of **12.8%** from the current price [26] Conclusion Kuaishou Technology is positioned to capitalize on the expanding AI video generation market, with strong user adoption and innovative features driving growth. The company faces risks but maintains a favorable outlook supported by robust revenue forecasts and competitive positioning.

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]

Core Insights - Company reported a 14% year-over-year (YoY) revenue growth in 3Q25, reaching RMB35.6 billion, which was 1% above consensus expectations [2] - Operating profit surged by 70% YoY to RMB5.3 billion, exceeding consensus by 16% [2] - The integration of AI across various business segments is driving sustainable profitable growth, with a focus on monetization and operational efficiency [1] Revenue and User Metrics - Daily Active Users (DAUs) reached a record high of 416 million, indicating strong user engagement [2] - Online advertising revenue grew by 14% YoY, benefiting from AI model enhancements, with domestic online ad revenue increasing by over 16% YoY [2] - E-commerce Gross Merchandise Volume (GMV) grew by 15% YoY, with pan-shelf-based GMV increasing by 37% YoY [2] Profitability and Margins - Operating profit margin (OPM) was reported at 14.9%, with domestic OPM at 15.7% and overseas OPM at -5.5% [2] - Adjusted net profit margin (NPM) was 14.0%, aligning with consensus expectations [2] AI Integration and Strategic Focus - Company has effectively integrated AI into its operations, enhancing material production, ad targeting, product matching, and user acquisition efficiency [1] - The focus on AI is expected to continue driving improvements in both e-commerce and online advertising segments [3] Future Outlook and Valuation - Company maintains its revenue forecasts for FY2025-27, reflecting consistent strategic execution [1] - New target price set at HK$66.0, based on an 11.0x FY2026E adjusted EPS of HK$6.00 [3]

Financial Data and Key Metrics Changes - Total revenue for Q3 2025 rose by 14.2% year-over-year to RMB 35.6 billion [5][32] - Adjusted net profit increased by 26.3% year-over-year to RMB 5 billion, with an adjusted net margin of 14% [5][36] - Operating profit surged by 69.9% year-over-year to RMB 5.3 billion [36] Business Line Data and Key Metrics Changes - Revenue from online marketing services reached RMB 20.1 billion, up 14% year-over-year [14][33] - E-commerce GMV grew by 15.2% year-over-year to RMB 385 billion [18] - Live streaming revenue increased by 2.5% year-over-year to RMB 9.6 billion [26][34] Market Data and Key Metrics Changes - Average Daily Active Users (DAUs) on the Kuaishou app surpassed 416 million, marking the third consecutive quarter of record highs [5][12] - Monthly Active Users (MAUs) reached 731 million [11] Company Strategy and Development Direction - The company continues to advance its AI strategy, focusing on scenario-based applications and innovative use cases [5][30] - Kling AI has been positioned as a key technology for video generation, with a focus on empowering creators and expanding its use cases [8][43] - The company aims to transform its organizational structure and product design to enhance its competitive edge in the AI era [30][37] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term growth prospects of Kuaishou, emphasizing the importance of AI in driving operational efficiency and business value [36][37] - The company anticipates continued investment in AI technologies to unlock further value across its content and business ecosystems [30][76] Other Important Information - The company declared a special dividend of HKD 2 billion in Q3, reflecting its solid financial position [36] - Total marketing spending from Omni Domain Platform marketing solutions accounted for over 65% of closed-loop marketing spending [15] Q&A Session Summary Question: Competitive landscape of video generation AI and Kling AI's strategy - Management acknowledged the growing competition in the video generation market and emphasized the importance of continuous innovation to meet user needs [40][42] Question: AI-powered business and operational efficiency - Management highlighted the integration of AI across Kuaishou's operations, improving content understanding, generation, and recommendations [48][51] Question: Online marketing services revenue acceleration - Management attributed the growth in online marketing services to increased impressions and higher CPM driven by AI technologies [55][57] Question: CapEx and profit margins related to AI investments - Management expects total CapEx for 2025 to increase in the mid to high double digits year-over-year, driven by investments in AI initiatives [74][76]

Financial Data and Key Metrics Changes - Total revenue for Q3 2025 rose by 14.2% year over year to RMB 35.6 billion, driven by growth across all business segments [3][29][30] - Adjusted net profit increased by 26.3% year over year to RMB 5 billion, with an adjusted net margin of 14% [3][33] - Operating profit surged by 69.9% year over year to RMB 5.3 billion, reflecting improved operating efficiency [29][31] Business Line Data and Key Metrics Changes - Revenue from online marketing services reached RMB 20.1 billion, up 14% year over year, with growth attributed to AI-driven enhancements in marketing solutions [12][30][46] - E-commerce GMV grew by 15.2% year over year to RMB 385 billion, supported by merchant incentives and traffic optimization [17][18] - Live streaming revenue increased by 2.5% year over year to RMB 9.6 billion, driven by high-quality content and AI innovations [24][31] Market Data and Key Metrics Changes - Average Daily Active Users (DAUs) on the Kuaishou app reached 416 million, marking the third consecutive quarter of record highs [3][10] - Monthly Active Users (MAUs) reached 731 million, reflecting sustained user growth and engagement [9][10] - Total spending from online marketing services driven by AI-generated marketing materials exceeded RMB 3 billion in Q3 [9] Company Strategy and Development Direction - The company continues to advance its AI strategy, focusing on scenario-based applications and innovative use cases to enhance operational efficiency and profitability [3][4] - Kuaishou aims to empower creators through its Kling AI platform, which has achieved significant advancements in video generation capabilities [5][6] - The strategic focus is on AI-powered film and television production, with plans to expand applications beyond traditional media [36][37] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term growth prospects, emphasizing the importance of AI in driving innovation and operational efficiency [33][34] - The competitive landscape for video generation AI is expected to evolve rapidly, with Kuaishou positioning itself to leverage its technological advancements [35][36] - Future investments will prioritize user needs and AI capabilities to enhance the overall business ecosystem [28][34] Other Important Information - The company declared a special dividend of HKD 2 billion in Q3, reflecting confidence in its financial position [33] - Total cash and cash equivalents amounted to RMB 106.6 billion as of September 30, 2025, indicating a robust balance sheet [33] Q&A Session Summary Question: Insights on Kling AI's competitive strategy - Management highlighted the attractiveness of the video generation market and the ongoing innovation driven by increasing competition [35] - The focus remains on empowering creators and enhancing technology for film and television production [36] Question: AI's role in content ecosystem and operational efficiency - AI technologies have been integrated across Kuaishou's operations, improving content understanding, generation, and recommendations [41][43] - The company is leveraging AI to enhance customer service efficiency, with over 70% of inquiries handled by AI systems [43] Question: Online marketing services revenue acceleration - Online marketing services revenue grew by 14% year over year, driven by increased impressions and higher CPM due to AI enhancements [46] - The company continues to optimize its marketing solutions to improve conversion rates and client spending [49]