China Securities Co.,Ltd: Securities: Keling is expected to replicate the "Quick Hand GIF" path AI short drama and has great potential.

China Securities Co., Ltd. Securities released a research report stating that in the short term, Keling mainly serves as an AI video tool, charging through B-end APIs and C-end member subscriptions; in the medium to long term, Keling is expected to replicate the "Kuaishou GIF" path of the mobile internet era, transitioning from a gif tool to a video community. Keling is backed by KUAISHOU-W (01024) with a user base of over 400 million, and is expected to become a community for the creation, viewing, and sharing of AI videos. Recently, videos related to "AI furry effects" on Kuaishou (01024) have received over 500 million views, demonstrating the potential for social discussion brought by AI. In addition, Kuaishou's Starlight short films have also released a series of AI short films such as "Shanghai New World Loading", with great potential for breaking boundaries. Key points from China Securities Co., Ltd. Securities: Keling: Leading global AI video capabilities Strong performance: According to various technical reports such as Google Veo2, Meta Movie Gen, etc., Keling AI's technical indicators are leading, including superior performance in video generation stability, consistency, etc. Chen Changsheng, Deputy Director of the State Council Research Office, also mentioned that "Keling's video evaluation internationally has surpassed Sora". High cost performance: Keling's price for generating a 5-second standard video is as low as 1 yuan (without considering discounts), compared to around 3 yuan for Runway, Sora, etc. Large user base: According to SimilarWeb, in February of this year, Keling's website traffic ranked 2nd globally among AI videos, with a traffic volume of 18.82 million. High overseas user recognition: Currently, over 80% of Keling's website traffic comes from overseas, showing a trend of "blooming domestically and aromatic overseas". According to incomplete statistics, Stability AI's former CEO, Y Combinator's CEO, and Musk have all expressed approval for Keling's video effects. Commercialization: Rich scenarios, large income space in the medium to long term Usage scenarios: Currently, Keling has four product forms including website, independent app, mini-program, and Kuaiying, targeting different scenarios and users. Keling's app caters to both creators and regular users, combining both tools and community attributes. In terms of usage scenarios, it includes advertising/marketing: including marketing material generation, live stream matching/AI try-on functions, AI short films: text-generated videos, image-generated videos, start and end frames, multiple image references, etc. Ordinary C-end entertainment users: for example, "furry" style filters and effects, can lead to viral spread. Large commercial space: Keling's monthly revenue has exceeded tens of millions of RMB by the end of the year, with rapid revenue growth recently. Looking towards domestic and overseas video creators, with the improvement in AI penetration in areas such as advertising live material, AI short films, and TV show creation, the estimated medium to long-term revenue space is expected to exceed 10 billion. Risk warning Macroeconomic risks, weaker than expected copyright protection, risks of unclear intellectual property rights division, risks of interruption in cooperation with IP or celebrities, risks of shifting public aesthetic preferences, intensified competition risks, risks of low user willingness to pay, risks of difficult changes in consumer habits, risks of governance in affiliated companies, risks of underperformance in online content, risks of underperformance in the development of generative AI technology, risks of high difficulty in product research and development, risks of product launch delays, risks of rising marketing costs, risks of talent loss, risks of rising labor costs, risks of policy regulation, risks of underperformance in commercialization capabilities.