First Read: Kuaishou Technology "1Q26 inline; Kling ARR tracking ahead" (Buy)

研报英文原文证据摘录

First Read: Kuaishou Technology "1Q26 inline; Kling ARR tracking ahead" (Buy)

pectively, with mgmt. highlighting strong demand tailwinds from 12/26E 3.88 3.81 -2 4.02

AI tools, AI short plays and lifestyle service verticals as the key drivers of non-ecom ad 12/27E 4.27 4.11 -4 4.63

outperformance. Looking ahead, Kuaishou plans to maintain traffic subsidies toward e- 12/28E 4.73 4.52 -4 5.17

com merchants to support merchant ROI and ecosystem resilience, which is likely to

weigh on e-com ad monetisation in the near term. Combined with continued softness in Kenneth Fong

Analyst

overseas ads, we expect Q2 ad growth to decelerate to 6.3% YoY. 3) E-commerce (-

kenneth-kc.fong@ubs.com

ve): E-commerce revenue growth slowed to MSD% YoY in Q1, mainly due to phased +852-3712 3890

take-rate rebates toward merchants. We expect such support measures will continue

into Q2. While supportive of long-term supply-side ecosystem health and merchant Jenny Yuan

retention, near-term monetisation remains under pressure. We now expect e-commerce

S1460525030004

revenue growth to be broadly flat YoY in Q2, with single-digit GMV growth likely offset jenny-za.yuan@ubs.com

by lower take rates. +86-21-3866 8912

Wei XiongWhat to do with the stock?

We maintain a constructive on KS for 3 reasons: 1) Strategic Positioning: We view S1460518100005

Kling's proactive strategy to aggressively capture market share as a right move, wei.xiong@ubs.com

particularly ahead of increased global competition from Chinese counterparts. For +86-21-3866 8883

instance, Seedance's global launch has been postponed due to copyright concerns. We

believe establishing an early presence in the market offers a distinct advantage in terms

of user engagement and securing critical clients. 2) Valuation: KS’s SOTP valuation can