Kuaishou Technology (1024 HK) (Neutral) - Thriving AI, softening core

研报英文原文证据摘录

Kuaishou Technology (1024 HK) (Neutral) - Thriving AI, softening core

Global Markets Research

Kuaishou Technology 1024.HK 1024 HK 28 May 2026

EQUITY: INTERNET & NEW MEDIA

RatingThriving AI, softening core Remains Neutral

Target priceHeavy AI investments amidst core commerce deceleration Reduced from HKD 51.00 HKD 57.00

Maintain Neutral on slowing core and margin compression Closing27 May 2026price HKD 45.28

We maintain our Neutral rating for Kuaishou with a lower target price of HKD51 (down from HKD57).

While the structural growth and rapid commercialization of Kling AI present attractive long-term optionality, Implied upside +12.6%

the stock faces acute operational headwinds in the near term that could lead to further earnings downward

revisions, in our view. Management’s soft 2Q26 guidance points to a visible growth deceleration across Market Cap (USD mn) 25,068.6

core revenue streams, alongside margin compression driven by heavily front-loaded AI infrastructure ADT (USD mn) 321.0

investments. We believe the current stock valuation at 10.3x FY26F P/E reflects this balanced risk-reward

profile. Consequently, we leave our FY26/27F earnings forecasts largely unchanged, but lower our SOTP- Relative performance chart

based target price to HKD51 (Fig.4). This implies an FY26F P/E of 11.6x (down from 13.0x previously),

factoring in softening core commerce growth and tightening margins.

Kling AI: Strong early traction, but competitive risks remain

Kling AI remains the most critical positive optionality for Kuaishou. Its 1Q26 revenue exceeded

CNY650mn, March annualized recurring revenue (ARR) neared USD500mn, and management has

guided for around CNY840mn in revenue for 2Q26. In our view, this performance makes our FY26F

revenue forecast of USD482mn for Kling well achievable.