Kuaishou Technology's commercial potential in the generative AI field is rapidly materializing. Fueled by the explosive overseas spread of its AI video generation model Kling, combined with technological enhancements to its core advertising business, the company is reshaping its growth narrative. Driven by this, Kuaishou's Hong Kong stock experienced a strong intraday surge, with gains at one point exceeding 12%.
Benefiting from the widespread dissemination of the "Motion Control" feature on overseas social media platforms in countries like South Korea and Russia, coupled with promotional activities for memberships, Kling's daily revenue on January 3, 2026, reached 2.5 times the average level seen in mid-December 2025.
The model's version 2.6, launched on December 3, 2025, achieved a breakthrough with its "simultaneous audio-video generation" capability, supporting the single-step creation of up to 10-second videos containing natural language, action sound effects, and ambient audio. This upgrade not only restructures the AI video creation workflow but has also significantly boosted user willingness to pay. Institutions project that Kling's revenue for 2025 will exceed $140 million, with growth expected to continue into 2026 through version iterations and expansion into the business-to-business (B2B) sector.
Beyond the breakthroughs in its standalone AI business, the efficiency gains from AI technology on Kuaishou's main operations are becoming increasingly pronounced. Thanks to the application of models like OneRec and GFRL in commercial scenarios, Kuaishou has not only optimized its Ad Load but also effectively enhanced its effective cost per mille (eCPM). This has driven steady growth in both user engagement and advertising revenue, providing solid support for the company's profit outlook.
Kling's revenue is showing marginal acceleration, with overseas markets emerging as a key growth engine. Kling's recent performance in international markets validates the product's viral potential and commercial value. According to a flash note from Everbright Securities, the "Motion Control" feature became a hot trend on social media during the New Year period. A vast number of users from countries like South Korea and Russia shared dance videos created with Kling, and this viral spread directly led to a surge in revenue.
Data indicates that, stimulated by both membership promotions and version updates, Kling's revenue began showing significant month-on-month growth starting from mid-December 2025. By January 3, 2026, single-day revenue had soared to 2.5 times the average daily value from mid-December. This trend of marginal acceleration suggests that Kling has successfully established a closed loop from user acquisition to commercial monetization.
Institutional analysis suggests that Kling's revenue scale is poised for continued expansion. Revenue for this business is projected to surpass $140 million in 2025. Looking ahead to 2026, with ongoing feature iterations and expansion towards B2B users, Kling warrants an independent valuation premium, becoming a new variable within Kuaishou's valuation framework.
Technological workflow reconstruction is a core growth driver, with the 2.6 model achieving "simultaneous audio-video generation." The enhancement of Kling's product capability is the fundamental factor driving growth. On December 3, 2025, Kling launched its video generation 2.6 model, specifically addressing the pain point in traditional AI video generation of "creating silent footage first, followed by manual dubbing." The new model boasts two core functions: "text-to-audiovisual" and "image-to-audiovisual," capable of outputting complete videos up to 10 seconds long in a single generation, incorporating content such as Chinese or English speech, action sound effects, and ambient atmosphere sounds.
While the AI business develops independently, Kuaishou is also comprehensively transforming its core advertising operations using AI technology. Data from the third quarter of 2025 showed that the application of AI technology drove a 1-2 percentage point increase in user engagement, while also contributing to a 4-5 percentage point rise in advertising revenue.
Specifically, the improvement in Ad Load is primarily attributed to the application of OneRec technology in commercial areas. By optimizing the precision of content-user matching, Kuaishou has increased advertising inventory while minimizing disruption to users. Regarding eCPM, the application of the GFRL model enables round-the-clock AI-powered pricing and intelligent selection of ad placement, accurately monitoring Return on Investment (ROI) and budget utilization, thereby enhancing the efficiency of advertising monetization.
The outlook for performance and the underlying valuation logic are positive. Based on the explosive growth of the AI business and the steady expansion of its main operations, the market holds an optimistic view of Kuaishou's profit prospects. Everbright Securities forecasts that Kuaishou's net profit for 2025 and 2026 will reach RMB 20.6 billion and RMB 23.8 billion, representing year-on-year growth of 16% and 15%, respectively. The current stock price corresponds to Price-to-Earnings (P/E) ratios of 14 times and 12 times for those years.
Future investment thesis will primarily revolve around two key catalysts: first, the sustained empowering effect of AI technology on Kuaishou's core advertising business; and second, the high-frequency data performance of the Kling business and the pace of its product updates and iterations. As the path for AI commercialization becomes clearer, Kuaishou's valuation framework is poised for a potential reshuffle.
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