CICC released a research report maintaining its earnings forecast and Outperform rating on KUAISHOU-W (01024). The current stock price corresponds to 15/13x 25/26 Non-IFRS P/E. The firm maintains its target price of HK$89 (18/15x 25/26 Non-IFRS P/E), representing 18% upside potential. KUAISHOU-W held its investor day series activities last week, sharing content ecosystem strategies at the Photosynthesis Conference and updating AI application progress. CICC's main views are as follows:
OneRec Recommendation System Innovation Empowers Platform-wide Growth
KUAISHOU-W launched the end-to-end generative recommendation model OneRec during its 2Q25 earnings disclosure. The core advantage lies in deep understanding of user behavior and dynamic adaptation capabilities, analyzing user historical behavior, real-time interaction data, and content characteristics through multimodal models to achieve more efficient supply-demand matching. According to its technical report, the OneRec architecture can significantly reduce communication and storage overhead, with operating costs being only 10.6% of traditional recommendation processes. OneRec has been processing 25% of request volumes on Kuaishou and Kuaishou Lite, driving user session duration increases of 0.54%/1.24%. The firm believes that as the model iterates and main platform traffic coverage increases, it will enhance user stickiness and session duration while reducing bandwidth and user retention costs.
In marketing, the company has applied large language models in 2Q to generate end-to-end user-interested materials, improving click-through rates and conversion rates. The firm believes that the OneRec technical framework and approach could be applied in marketing and e-commerce fields in the future, achieving multi-dimensional optimization of community ecosystem and commercial monetization.
Kling Ecosystem Development Strengthens, AI Content Penetration on Main Platform Increases
Kling achieved revenue exceeding RMB250 million in 2Q25, showing significant quarter-over-quarter growth. Technically, Kling 2.1 released first-and-last frame functionality on August 22, with win-loss ratio scores surpassing Midjourney and Seedance 1.0 mini. In terms of creator ecosystem and main platform empowerment, Kling upgraded its creator program on August 30, supporting creators through Kling inspiration values, cash, and Kuaishou traffic support. Gai Kun, head of Kling AI division, disclosed at the Photosynthesis Conference that AI content playback volume on Kuaishou in July increased 321% compared to six months earlier.
Multiple Strategies Drive Creator Ecosystem Improvement and Commercial Prosperity
On one hand, the platform's creator ecosystem continues to improve. Company CEO Cheng Yixiao stated: 1) In strategic creator empowerment, the company will continue to strengthen public-private domain circulation and promote "short video-livestreaming integration"; 2) In the creator ecosystem, over the past year, the number of submissions by creators with over 10,000 followers increased by more than 100%, and the number of creators becoming professional streamers grew by 8%.
On the other hand, new content domains empower creators to drive commercial prosperity. Wang Jianwei, head of the company's e-commerce division, stated that daily commercial content posts exceed 6.6 million, attracting over 320 million users to watch and bringing commercial benefits to 3.7 million creators. In emerging content tracks, the company indicated that for content marketing opportunities in short dramas and mini-games, it provides creators with a monetization solution set, expecting to generate revenue sharing income at the hundred-million level for creators over the next year.