Bank of America Securities has issued a research report reiterating a "buy" rating for Kuaishou-W (01024) with a target price of HK$63, citing attractive valuation metrics.

The report highlights that the company's net cash position is close to half of its share price, making the post-2026 fiscal year price-to-earnings ratio, adjusted for cash, approximately 5 times attractive.

Within the bank's sum-of-the-parts valuation, the Kling AI segment is assigned a value of HK$31, equivalent to US$18 billion, based on a projected 2026 fiscal year price-to-sales multiple of 35 times.

Optimism on Kling AI Following Investor Meeting

The report indicates that following Kuaishou's investor meeting, the bank holds an optimistic view on Kling AI, given its world-leading position in AI video models and accelerating commercialization efforts.

Revenue forecasts for Kling are seen to have potential upside, and the bank will closely monitor model upgrades and value-unlocking events for the segment.

Potential Restructuring and Core Business Outlook

The bank notes that Kuaishou announced in May it is evaluating options to restructure Kling AI, which may involve external financing.

Such financing is primarily explained as a move to retain and attract talent. Regarding a potential initial public offering for Kling AI, the bank believes regulatory approval typically requires a certain timeframe.

For Kuaishou's core business, growth is anticipated to resume as the comparison base normalizes in the coming period.