Dongfang Securities forecasts that Kuaishou-W (01024) will achieve adjusted net profits attributable to shareholders of 20.4 billion, 22.5 billion, and 25.9 billion yuan for the years 2025 to 2027. The firm maintains its valuation of 18 times PE for the company in 2026, corresponding to a fair value of 404.8 billion CNY, equivalent to 454.2 billion HKD (using an exchange rate of 0.891 HKD/CNY). This results in a target price of HK$104.36 per share, and the "Buy" rating is reaffirmed.
Following the overseas breakout of Kling in early January, both revenue and DAU remained at relatively high levels throughout the month, demonstrating strong sustainability of its popularity. The significance of the current data lies in the platform stabilizing at a higher baseline. Initially, user growth expanded in low ARPU regions such as Southeast Asia and Central Asia, while revenue is now gradually increasing in regions with higher payment capacity. The latter is expected to contribute more significantly to the growth of Kling's ARR.
Additionally, the new Kling 3.0 version is in internal testing. Built on a unified architecture, it offers better workflow connectivity. A key differentiator from competitors' iterations is its native text output capability, which is anticipated to further advance the technological frontier. The product update focuses on improving efficiency across professional creation workflows. If fully launched before the Lunar New Year, it could sustain the product momentum seen in January and stimulate demand.
After gaining traction in January, Kling's DAU has remained elevated. According to Sensor Tower data, Kling's overseas mobile revenue reached $3.09 million in January, a 112% increase month-over-month. DAU hit 6.94 million, up 139% from the previous month. By country, revenue in the United States, the largest source of mobile revenue, continues to fluctuate while trending upward.
In December, Kling's total revenue was $20 million. Assuming a revenue split of 10% from mobile and 90% from web, and considering mobile revenue grew 112% month-over-month in January (based on Sensor Tower data) while web revenue is estimated to have grown 10% to 20%, Kling's total revenue for January is projected to be between $24 million and $26 million, representing a sequential growth of 20% to 30%.
The new Kling 3.0 version is currently in internal testing. If released before the Lunar New Year, it is expected to catalyze a new wave of creative activity, building on the product's January momentum. Early evaluations suggest potential iterations include: (1) Kling 3.0 is trained on a unified multimodal foundation, supporting text-to-video, image-to-video, reference-based video generation, and integrated video editing. Generated video length can be flexibly controlled between 3 to 15 seconds, with more natively integrated and realistic audio output. (2) Intelligent storyboarding featuring a multi-shot workflow allows for finer control over camera shots. (3) A significant upgrade involves subject consistency, enabling the locking of core elements of a character or scene to maintain detail accuracy during camera movements and scene transitions, preventing drift. (4) A key differentiating iteration may be the "native text output" function. Current video generation technology has not yet fully mastered clear and accurate text rendering, which somewhat limits workflow efficiency. If version 3.0 achieves a substantial breakthrough in text output, it is expected to accelerate the release of downstream demand.
Risk warnings include a slower-than-expected recovery in macro consumption, lower-than-expected domestic commercialization efficiency, increased losses in overseas operations, and slower-than-anticipated technological iterations for Kling.