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<Research> CMS: KUAISHOU-W (01024.HK) 1Q26 Results Beat; Kling Commercialization Accelerates Monetization
Recommend 31 Positive 49 Negative 20 |
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China Merchants Securities published a report stating that KUAISHOU-W (01024.HK) delivered 1Q26 results that beat expectations. Total revenue reached RMB33.7 billion, up 3.4% YoY, slightly better than the markets 1% forecast. Online marketing revenue was RMB19.6 billion, up 9.3% YoY and 1% above expectations, mainly driven by explosive growth in AI-generated short dramas and strong advertising demand from AI applications. In 1Q26, domestic online marketing revenue growth exceeded 10%, with large AI models contributing an incremental 34% to domestic marketing revenue. Overall e-commerce revenue recorded mid-single-digit growth. GMV grew steadily but the commission rate declined, mainly due to merchant subsidies and tax compliance impacts. The number of active merchants investing in traffic acquisition increased 38% YoY, while GMV from shelf-based search scenarios rose by about 30%. The report noted that other services revenue in 1Q26 reached RMB5.6 billion, up 15.9% YoY and 2% above expectations, mainly due to Kling AI generating over RMB650 million in single-quarter revenue, significantly exceeding expectations by 29%. Live-streaming revenue was RMB8.5 billion, down 13.5% YoY, in line with expectations, reflecting continued regulation of the entertainment live-streaming ecosystem. Gross margin was 51.2%, down 3.4 ppts YoY, primarily dragged by increased investment in AI computing power and a higher contribution from lower-margin businesses such as short dramas. The broker believes KUAISHOU-W is at a critical inflection point, driven by AI-led content ecosystem reshaping and commercialization value release. Klings faster-than-expected monetization and leading market position validate the certainty of a second growth curve. AI-generated short dramas, AI marketing agents and AI-powered e-commerce search are driving comprehensive AI penetration, continuously injecting incremental growth into traditional businesses. The company maintains ample cash reserves and an annual shareholder return rate of about 4%, upholding solid financial discipline while firmly investing in AI. The broker maintained its Overweight rating with a TP of HKD64, corresponding to 15x/13x FY2026/FY2027 adjusted PE.(ha/u) Auto-translated by AI This article was automatically translated by AI, the original language version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. More Details
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