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<Research> CMS: KUAISHOU-W (01024.HK) 1Q26 Results Beat; Kling Commercialization Accelerates Monetization
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, ...
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<Research> CMS: KUAISHOU-W (01024.HK) 1Q26 Results Beat; Kling Commercialization Accelerates Monetization
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China Merchants Securities published a report stating that KUAISHOU-W (01024.HK)  +0.660 (+1.471%)    Short selling $817.42M; Ratio 19.341%   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.

Related News CICC: KUAISHOU-W (01024.HK) 1Q Revenue In Line; Profit Beats
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)(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2026-05-29 16:25.)

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