Daiwa has released a research report announcing a reassessment of the valuation basis for KUAISHOU-W's core business and its Kling AI unit. The firm has reaffirmed its "Buy" rating on KUAISHOU-W and raised its 12-month target price from HK$63 to HK$72.

KUAISHOU-W has repurchased shares worth HK$854 million year-to-date. Its total yield is projected to double from approximately 2% in 2025 by 2026.

Daiwa noted that KUAISHOU-W's Q1 2026 results were largely in line with market expectations, with operating revenue reaching RMB 33.716 billion, a year-on-year increase of 3.4%. The performance of "Kling AI" once again exceeded market expectations, generating revenue of RMB 650 million in the first quarter, representing growth of over 300% year-on-year. Its annualized run rate reached $500 million as of March.

Furthermore, media reports in May indicated that Kling AI's ARR is projected to reach $1.3 billion by Q1 2027. The company is reportedly planning a potential spin-off listing with a valuation target of $20 billion, further highlighting a clear path for Kling AI's accelerated commercialization.

Daiwa currently estimates that, under a sum-of-the-parts valuation, Kling AI could contribute approximately 50% of the group's total valuation, marking a structural shift in the investment narrative.