KUAISHOU(01024) EBSCN·2025-03-31 14:45Investment Rating - The report maintains a "Buy" rating for the company with a target price of 68.8 HKD, up from the current price of 56.60 HKD [3][57]. Core Insights - The company is experiencing a slowdown in fundamental growth but is focusing on the development and commercialization of its AI product, Kling AI, which shows promising user growth and monetization potential [1][14]. - The financial performance for Q4 2024 met expectations, with total revenue of 35.4 billion RMB, a year-on-year increase of 8.7%, and adjusted net profit of 4.7 billion RMB, aligning with forecasts [1][34]. Summary by Sections 1. Platform Ecosystem - Kling AI is at the forefront of the industry, with significant updates enhancing its text-to-video capabilities and user engagement [10][14]. - The user base for Kling AI is expected to grow rapidly, with the app achieving notable rankings in both domestic and international markets [14][15]. - The AI model has shown strong commercial potential, with revenue exceeding 100 million RMB since monetization began [18]. 2. Financial Performance - Total revenue for Q4 2024 was 35.4 billion RMB, slightly below expectations, while adjusted net profit was in line with forecasts [30][34]. - The gross margin for Q4 2024 was 54.0%, reflecting a year-on-year increase of 0.9 percentage points [34]. - Sales and marketing expenses increased by 11.0% year-on-year, indicating ongoing investment in user acquisition and retention [36]. 3. Business Segments - Online marketing revenue reached 20.6 billion RMB, a year-on-year increase of 13%, driven by improved advertising pricing and AI optimization [43]. - E-commerce GMV was 462.1 billion RMB, growing 14.4% year-on-year, supported by a rise in active buyers [47]. - Live streaming revenue was 9.85 billion RMB, showing a slight decline of 2.0% year-on-year, but the rate of decline is improving [54]. 4. Valuation and Investment Recommendations - The adjusted net profit forecasts for 2025 and 2026 have been revised downwards to 19.95 billion RMB and 24.04 billion RMB, respectively, due to increased tax expenses and competitive pressures in e-commerce [57]. - The company is expected to benefit from the growth of Kling AI, with a potential increase in stock price as user numbers and monetization progress [57].