Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 68.73 [7][24]. Core Insights - The company's Q4 revenue grew by 8.7% year-on-year to RMB 35.38 billion, aligning with consensus expectations of RMB 35.7 billion. The gross margin improved by 0.9 percentage points to 54%, and adjusted net profit increased by 13.3% year-on-year to RMB 4.7 billion, also meeting expectations [1][19]. - For 2025, total revenue is expected to rise by 11%, with advertising revenue and GMV growth slowing to 14% and 13% respectively, while adjusted net profit is projected to reach RMB 20.6 billion [1][20]. - The company is anticipated to accelerate revenue growth starting in Q2 2025, driven by AI commercialization opportunities in areas such as 2C subscriptions, 2B e-commerce advertising, and API calls, which could contribute an additional RMB 400-800 million in revenue [1][20]. Revenue and Profitability - Q4 e-commerce and other revenue growth slowed to 14.1%, below expectations by 3.5%. E-commerce GMV grew by 14.4% year-on-year, with a notable increase in the number of active merchants [2]. - The AI capabilities are expected to enhance advertising efficiency and optimize targeting, with Q4 advertising revenue growing by 13.3% year-on-year [3][14]. - The company has adjusted its revenue forecasts for 2025 and 2026, with a slight increase of 0.6% for 2025 and a minor decrease of 0.1% for 2026, while the adjusted net profit forecast for 2025 is revised down by 12.6% to RMB 20.6 billion [20][22]. Valuation and Market Position - The report introduces a new valuation for 2027, projecting revenue and adjusted net profit of RMB 163.8 billion and RMB 28.3 billion respectively. The target price has been raised to HKD 68.73 based on a sum-of-the-parts (SOTP) valuation approach [4][24]. - The valuation reflects a price-to-earnings (PE) ratio of 10.2 times for the advertising business, which is at a discount compared to comparable companies, indicating potential for growth as advertising efficiency improves with AI [24][25]. Business Segments - The "live streaming+" model continues to innovate, driving growth in traditional sectors, with significant increases in user engagement metrics for related services [12]. - The local lifestyle business saw GMV double year-on-year, with a 52.4% increase in monthly paying users, indicating strong demand and effective service optimization [13]. - The AI tool "可灵" has shown promising results in enhancing content creation and advertising efficiency, with significant revenue contributions expected from its commercialization efforts [14].

Financial Performance - Total revenue for the year ended December 31, 2024, reached RMB 126.898 billion, representing an 11.8% year-over-year increase from RMB 113.470 billion in 2023[4]. - Adjusted net profit for the year was RMB 17.716 billion, a significant increase of 72.5% compared to RMB 10.271 billion in the previous year, with an adjusted net profit margin of 14.0%[4]. - Operating profit for the year was RMB 15.287 billion, a remarkable increase of 137.7% from RMB 6.431 billion in 2023[4]. - Gross profit for 2024 was RMB 69.292 billion, up 20.7% from RMB 57.391 billion in 2023, with a gross margin increase from 50.6% to 54.6%[41]. - The company reported a net profit of RMB 15.344 billion for the year, up from RMB 6.399 billion in 2023, marking a growth of 140.5%[113]. - Basic earnings per share for the year were RMB 3.56, compared to RMB 1.48 in 2023, reflecting a significant increase[111]. User Engagement - Average daily active users (DAUs) increased to 399.4 million in 2024, up from 379.9 million in 2023, while average monthly active users (MAUs) rose to 709.7 million from 678.2 million[12]. - The average daily usage time for Kuaishou users reached 125.6 minutes, with total user usage time increasing by 5.8% year-over-year[16]. - In Q4 2024, the average daily active users of Kuaishou reached 401 million, with a year-over-year growth of 4.8%, while monthly active users reached 736 million, growing by 5.0%[16]. E-commerce Growth - The total e-commerce Gross Merchandise Volume (GMV) for the year was RMB 1,389.582 billion, compared to RMB 1,184.371 billion in 2023, indicating strong growth in the e-commerce sector[12]. - The e-commerce GMV in Q4 2024 grew by 14.4% year-over-year to RMB 462.1 billion, with monthly active buyers increasing by 10.0% to 143 million[21]. - The number of monthly active merchants in Kuaishou's e-commerce ecosystem grew by over 25.0% year-over-year in Q4 2024[23]. Marketing and Advertising - Kuaishou's online marketing service revenue in Q4 2024 was RMB 20.6 billion, representing a year-over-year increase of 13.3%[19]. - Online marketing service revenue rose by 20.1% to RMB 72.419 billion in 2024, driven by optimized marketing solutions and AI technology[35]. - The daily average consumption of AIGC marketing materials exceeded RMB 30 million in Q4 2024, significantly enhancing customer marketing efficiency[19]. Research and Development - The company is leveraging advanced AI technology to enhance content creation and user experience, positioning itself at the forefront of industry transformation[13]. - Research and development expenses rose by 4.7% to RMB 3.5 billion in Q4 2024, reflecting increased employee benefits costs[69]. International Operations - The overseas segment reported an operating loss of RMB 934 million, compared to a loss of RMB 2,789 million in the previous year, indicating an improvement[129]. - Overseas revenue grew by 52.9% year-on-year in Q4 2024, with online marketing revenue increasing by 83.5%[27]. Cash Flow and Investments - Net cash generated from operating activities for the year ended December 31, 2024, was RMB 29.8 billion, compared to RMB 20.8 billion in 2023[106]. - The net cash used in investing activities was RMB 36.677 billion, compared to RMB 19.865 billion in 2023, indicating increased investment[118]. - The total available funds as of December 31, 2024, amounted to RMB 92.8 billion, up from RMB 61.6 billion in 2023[105]. Corporate Governance - The board has decided to reallocate part of the unused net proceeds to working capital and general corporate purposes, including share buybacks, to enhance resource allocation flexibility[158]. - The company has complied with all applicable corporate governance code provisions except for the separation of the roles of Chairman and CEO[159]. - The company will continue to focus on long-term strategic needs and optimize operational efficiency[158]. Future Outlook - The company aims to enhance its AI-driven content platform and create long-term value for users and partners[29]. - The company is actively considering mergers and acquisitions as part of its growth strategy[178]. - Forward-looking statements in the announcement are subject to risks and uncertainties, and investors should not overly rely on them[173].

Investment Rating - The report maintains a "Buy" rating for Kuaishou, with a target price of HKD 75.96 per share, based on a 15x PE valuation for 2025 [4][5]. Core Viewpoints - Kuaishou's Keling technology is positioned to lead in the multi-modal video generation space, with significant competitive advantages and ongoing technological iterations [2][8]. - The report emphasizes the importance of continuous monitoring of video generation model advancements and AI empowerment in existing business operations [4][8]. - Kuaishou's revenue and profit forecasts for 2024-2026 are projected at CNY 127.19 billion, CNY 141.03 billion, and CNY 154.13 billion, respectively, with adjusted net profits of CNY 15.22 billion, CNY 19.05 billion, and CNY 23.42 billion [9]. Summary by Sections Section 1: Video Generation Model Development - The video generation model is entering a rapid development phase, with Kuaishou's Keling technology being a top player globally, particularly in core evaluation metrics such as consistency and precise control [22][31]. - The DiT architecture is identified as the mainstream framework for video generation, with Kuaishou quickly achieving technological breakthroughs [22][23]. Section 2: Kuaishou's Competitive Position - Keling's technological capabilities and data resource advantages position it favorably for future developments in the AI-driven content community [8][19]. - Kuaishou's strategic focus and unified organizational structure enhance its execution efficiency [8][19]. Section 3: Financial Performance and Market Position - Kuaishou's user engagement metrics remain strong, with MAU and DAU showing consistent growth, and daily average usage time maintained at high levels [8][9]. - The e-commerce GMV is expected to grow by 13.5% in 2025, outpacing the market, while online marketing services are projected to increase by 15.6% [8][9].

Investment Rating - The report maintains a "Buy" rating for Kuaishou, with a target price of HKD 75.96 per share, based on a 15x PE valuation for 2025 [4][5]. Core Viewpoints - Kuaishou's technology in multi-modal video generation is globally leading, particularly with its Keling model, which is positioned as a top competitor in the industry [2][8]. - The report emphasizes the importance of continuous technological iteration in video generation models and Kuaishou's competitive advantages in this space [4][8]. - The company is expected to see steady growth in its e-commerce GMV, projected to increase by 13.5% in 2025, outpacing the market [8]. Summary by Sections Financial Forecast and Investment Recommendations - Adjusted net profit forecasts for Kuaishou are CNY 176 billion, CNY 201 billion, and CNY 247 billion for 2024, 2025, and 2026 respectively [4]. - The report highlights a stable financial outlook with a low to mid-range valuation, providing a good safety margin for investors [8]. Video Generation Model Development - The report identifies the DiT architecture as the mainstream framework for video generation, with Kuaishou's Keling model being a leading player in this domain [22][23]. - Kuaishou's Keling model is noted for its superior performance in key evaluation metrics such as consistency and precise control, making it a top competitor globally [8][30]. User Engagement and Commercialization - Kuaishou's user engagement metrics remain strong, with MAU and DAU showing consistent growth, and average daily usage time maintained at 120-130 minutes [8][9]. - The report anticipates a transition in Kuaishou's business model from PUGC tools to multi-scenario empowerment, indicating a shift towards broader user engagement and monetization strategies [19][22].

Investment Rating - The report maintains a "Buy" rating for Kuaishou, with a target price of HKD 75.96 per share, based on a 15x PE valuation for 2025 [4][5]. Core Viewpoints - Kuaishou's Keling technology is positioned to lead in the multi-modal video generation space, with significant competitive advantages and ongoing technological iterations [2][4]. - The report emphasizes the importance of continuous monitoring of video generation model advancements and AI empowerment in existing business operations [4][8]. Summary by Sections Financial Forecast and Investment Recommendations - Adjusted net profits for Kuaishou are projected to be CNY 176 billion, CNY 201 billion, and CNY 247 billion for 2024, 2025, and 2026 respectively [4]. - The report anticipates a 13.5% growth in e-commerce GMV for Kuaishou in 2025, outpacing the market [8]. Video Generation Model Development - The report identifies Keling as a top player globally in video generation technology, particularly excelling in consistency and precise control metrics [8][22]. - Kuaishou's Keling is noted for its rapid iteration and development, maintaining a competitive edge in the evolving landscape of video generation technology [22][33]. User Engagement and Commercialization - Kuaishou's user engagement metrics, including MAU and DAU, show steady growth, with daily average usage time remaining high at 120-130 minutes [8][9]. - The report highlights the ongoing optimization of Kuaishou's internal operations to enhance user experience and commercial performance [8][9].

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - Kuaishou is a leader in the AI-driven video generation field, with its AI capabilities expected to enhance advertising efficiency [1][5] - The launch of the "Keling AI" app and its various product offerings indicate a strong commitment to AI development [3][4] - The company has shown significant user growth and competitive strength in the AI model capabilities, ranking 20th in a global list of generative AI applications [4] Financial Projections - Total revenue projections for 2024-2026 are estimated at 127.3 billion, 141.4 billion, and 155.7 billion CNY respectively, reflecting a growth rate of 20%, 12%, and 11% [6][8] - Non-GAAP net profit projections for the same period are 17.6 billion, 22.7 billion, and 27.8 billion CNY, with growth rates of 279%, 72%, and 29% [6][8] - The expected EPS (Non-GAAP) for 2024-2026 is 4.10, 5.27, and 6.47 CNY respectively [8] User Growth and Product Development - As of December 2024, Keling AI has 6 million users, generating 65 million videos and 175 million images [4] - The Keling AI app has introduced various membership tiers, enhancing user engagement and monetization opportunities [3] Advertising Efficiency - AI is anticipated to improve advertising efficiency and reduce content generation costs, benefiting both small and large advertisers [5] - The increase in advertising supply is expected to enhance revenue for advertising platforms, leading to a positive industry outlook [5]

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company is a leader in the AI-driven video generation field, with its "可灵 AI" product expected to enhance advertising efficiency [1][5] - The company has launched a standalone "可灵 AI" app, expanding its AI offerings across various platforms [3] - The user base for "可灵 AI" has reached 6 million, generating 65 million videos and 175 million images, indicating strong competitive capabilities [4] - The AI technology is anticipated to lower production costs and improve advertising returns on investment (ROI), benefiting both small and large advertisers [5] Financial Projections - Total revenue projections for 2024-2026 are 127.3 billion, 141.4 billion, and 155.7 billion CNY respectively, with a growth rate of 20%, 12%, and 11% [6][8] - Non-GAAP net profit estimates for the same period are 17.6 billion, 22.7 billion, and 27.8 billion CNY, reflecting significant growth rates of 279%, 72%, and 29% [6][8] - The earnings per share (EPS) is projected to increase from 2.36 CNY in 2023 to 6.47 CNY by 2026 [8][10] Market Position - The company ranks 20th in the 2025 global list of generative AI consumer applications, surpassing competitors like Sora and Midjourney [4] - The web version of "可灵 AI" saw a 44.57% month-over-month increase in traffic, reaching 18.04 million visits in January 2025 [4]

Investment Rating - The report maintains a "Buy" rating for the company, with a target price of 76.03 HKD per share, based on a 15x PE valuation for 2025 [3][10]. Core Insights - The company's AI capabilities, particularly the KuaLing model, show significant improvement, with a 195% enhancement in overall performance from version 1.5 to 1.6, indicating strong commercial potential and business empowerment [1]. - The company is experiencing healthy traffic growth, with a projected 4.01 billion daily active users (DAU) in Q4 2024, representing a year-over-year increase of 4.8% [2]. - The e-commerce sector is expected to see a 14% year-over-year growth in GMV during the Double 11 shopping festival, driven by both supply and demand factors [2]. - The advertising revenue is projected to grow by 15% year-over-year, supported by external advertising cycles [2]. Summary by Sections Revenue and Profitability - The company expects total revenue in Q4 2024 to reach approximately 357 billion CNY, reflecting a year-over-year increase of 9.6% [5]. - The adjusted net profit for Q4 2024 is estimated at around 45.4 billion CNY, with an adjusted profit margin of 12.7% [5]. - The gross margin is anticipated to improve by 1.1 percentage points year-over-year to 54.2% in Q4 2024 [5]. Financial Forecasts - The adjusted net profit forecasts for 2024, 2025, and 2026 are 175.51 billion CNY, 201.14 billion CNY, and 243.24 billion CNY, respectively [3][10]. - The company’s revenue is projected to grow from 127.19 billion CNY in 2024 to 141.03 billion CNY in 2025, and further to 153.44 billion CNY in 2026, with respective growth rates of 12.1%, 10.9%, and 8.8% [6][8]. Market Position and Competitive Landscape - The company is actively enhancing its AI capabilities and integrating external large model technologies, which are expected to improve content delivery and advertising efficiency [1]. - The report highlights the importance of the company's ongoing commercial exploration and product integration efforts, particularly in the e-commerce and advertising sectors [1][2].

Group 1 - Kuaishou-W has received net purchases from southbound funds for three consecutive days, with a cumulative net purchase amount of HKD 18.11 billion and a stock price increase of 14.65% [1] - On February 17, the total trading volume of active stocks through the Hong Kong Stock Connect reached HKD 1019.88 billion, with a net purchase amount of HKD 44.42 billion [1] - Among the active stocks on February 17, Kuaishou-W had a trading volume of HKD 36.45 billion and a net purchase amount of HKD 5.84 billion [1]

Investment Rating - The investment rating for the company is "Buy" with a target price of 68 HKD, maintaining the rating for the next 6 months [1]. Core Insights - The company's Q3 2024 performance showed steady growth in core business, with revenue reaching 31.1 billion RMB, a year-on-year increase of 11.4%, and adjusted net profit of 3.9 billion RMB, up 24.4% year-on-year [1]. - User traffic reached a record high, with daily active users (DAU) averaging 408 million, a year-on-year increase of 5.4% [1]. - The online marketing service revenue grew by 20% year-on-year to 17.6 billion RMB, driven primarily by external advertising [1]. - The company's e-commerce gross merchandise volume (GMV) increased by 15.1% year-on-year, reaching 334.2 billion RMB [1]. - The overseas business saw a significant growth of 104.1% year-on-year, with revenue reaching 1.33 billion RMB [1]. Summary by Sections Financial Performance - In Q3 2024, the company achieved operating revenue of 31.1 billion RMB, with a gross profit of 16.9 billion RMB, reflecting a 17% year-on-year increase [1]. - Sales and marketing expenses rose by 15.9% to 10.4 billion RMB, accounting for 33.3% of total revenue [1]. - Research and development expenses increased by 4.5% to 3.1 billion RMB, representing 10% of total revenue [1]. User Engagement - The average DAU/MAU for the company's application was 408 million/714 million, with DAU reaching a historical high [1]. - The average daily usage time per DAU was 132.2 minutes, a year-on-year increase of 7.3% [1]. Marketing and Advertising - The external advertising segment showed strong growth, with UAX consumption in external circulation increasing to approximately 50% [1]. - The number of active merchants in internal circulation increased by over 50% year-on-year [1]. E-commerce and Other Services - Other service revenue, including e-commerce, grew by 17.5% year-on-year to 4.2 billion RMB [1]. - The number of active buyers in e-commerce increased by 12.2% year-on-year to 133 million [1]. Live Streaming and Overseas Business - Live streaming revenue was 9.3 billion RMB, a year-on-year decrease of 3.9% [1]. - The overseas business revenue reached 1.33 billion RMB, with a significant reduction in operating losses by 75.9% [1]. Investment Outlook - The company is expected to achieve operating revenues of 127.1 billion RMB and 140.7 billion RMB for 2024 and 2025, respectively, with adjusted net profits of 17.6 billion RMB and 21.6 billion RMB [1].