On July 3, Kuaishou-W rose 5.25% in regular trading, trading at HK$45.0/share, with turnover of HK$327 million. The stock extended gains following the company's formal announcement of Kling AI's spinoff and independent capitalization.

On the news front, Kuaishou officially announced on July 2 the completion of a $3 billion capital injection into Kling AI, its AI video generation subsidiary, achieving a post-money valuation of $18 billion. Tencent participated in this investment round. The company plans to initiate Kling AI's Hong Kong IPO process within the next 12 months, with proceeds earmarked for computing infrastructure expansion, data center construction, and talent acquisition.

Financial data underscores the subsidiary's momentum: Q1 revenue exceeded RMB 650 million, representing over 300% year-over-year growth, with March annualized recurring revenue approaching $500 billion. The final valuation was adjusted down from an initial $20 billion target set in April. Multiple brokerages including J.P. Morgan and China Merchants Securities have maintained bullish ratings on Kuaishou, citing Kling AI's value unlock potential.

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