Kuaishou Technology (Kuaishou-W, 01024) has signed a capital-increase agreement that will bring external investors into its AI video-generation subsidiary, Beijing Kling Intelligent Technology Co., Ltd.

• Fund-raising scale – Initial investors have committed RMB 13.82 billion (USD 2.03 billion). – A further 15 additional investors signed joinder agreements for RMB 5.22 billion (USD 0.77 billion). – Beijing Kling may accept more investors within 60 days, capping total proceeds at RMB 20.45 billion (USD 3.00 billion), equal to 16.67% of the enlarged registered capital.

• Post-deal ownership Assuming the full subscription limit and full utilisation of new employee equity schemes, Kuaishou’s indirect stake in Beijing Kling will fall from 100% to approximately 68.33%. The subsidiary will adopt a weighted-voting structure; Kuaishou will retain control and consolidate Beijing Kling’s results.

• Valuation benchmark Management set a pre-transaction valuation of USD 15.00 billion for Beijing Kling, referencing peer comparables, industry growth prospects in AI video generation and investor negotiations.

• Key investors and connected transactions – Connected parties include entities linked to independent non-executive directors Lu Rong (Party A) and Zhang Fei (Party C), Tencent-controlled companies (Party B) and a company related to a Beijing Kuaishou Ads director (Party D). – Subscriptions by Parties A, B, C and D qualify as connected transactions but remain below thresholds requiring shareholder approval.

• Redemption rights All investors receive put options enabling them to require Beijing Kling to repurchase their interests at cost plus 8% annual simple return if an IPO is not completed by the earlier of October 30 2031 or five years after final payment, or if certain regulatory milestones are missed.

• Employee participation On 2 July 2026 Beijing Kling adopted three share-based incentive plans covering up to 15% of post-money capital. Initial grants total 7.17 million equity awards/options (7.45% of capital). – Executive Director and Beijing Kling chairman Cheng Yixiao received 0.96 million awards (1.00% stake) for nil consideration, subject to a three-year lock-up and six-year claw-back. – CEO Gai Kun received 2.89 million awards (3.00% stake) with 10-to-1 weighted voting rights on up to 4% of capital.

• Restructuring plan Kuaishou will consolidate all Kling AI assets and related businesses under Beijing Kling within nine months after the latest payment date, enabling the unit to operate as a foreign-invested enterprise ahead of a planned IPO.

• Financial effects Kuaishou will continue to consolidate Beijing Kling, so no gain or loss is expected on completion. Proceeds—up to RMB 20.45 billion—will fund Beijing Kling’s business expansion, operations and team development.

• Rationale Management expects the fundraising and restructuring to highlight Beijing Kling’s standalone value, attract specialised AI investors and partners, optimise capital allocation for the wider Kuaishou Group, and sharpen managerial accountability.

All transactions are classified as discloseable under Hong Kong Listing Rules and have been approved by Kuaishou’s board; directors with interests in connected parties abstained from voting.