Orient maintains a "Buy" rating on KUAISHOU-W(01024), with a target price of 104.36 Hong Kong dollars.

Orient releases a research report predicting that KUAISHOU-W (01024) will achieve adjusted net profit attributable to shareholders of 20.4/22.5/25.9 billion yuan for the years 2025-2027. They maintain their previous valuation of the company at 18x PE for the year 2026, resulting in a fair value of 404.8 billion CNY, equivalent to 454.2 billion HKD (at an exchange rate of 0.891 HKD to CNY). Their target price is 104.36 HKD per share, and they maintain a "buy" rating. Orient's main points are as follows: After the overseas launch of Kuaishou in early January, both revenue and DAU remained relatively high throughout the month, showing good sustainability in popularity. The significance of current data lies in the fact that after stabilizing at a higher level overall, Kuaishou is expanding its traffic in lower ARPU regions (such as Southeast Asia and Central Asia) and increasing revenue in higher-paying regions. It is expected that the latter will have a greater impact on increasing Kuaishou's ARR. Additionally, the new Kuaishou 3.0 version, currently in internal testing, has better workflow integration under a unified architecture. Different from competitors, it focuses on native text output, which is expected to further advance technological capabilities. The product emphasizes improving efficiency in various stages of professional content creation. If fully implemented before the Chinese New Year, it is expected to continue the product's popularity from January and drive demand. After the product's launch in January, current DAU levels remain high. Sensor Tower data shows that Kuaishou's total overseas mobile revenue in January was 3.09 million USD, a 112% increase from the previous month; DAU was 6.94 million, a 139% increase. In terms of countries, revenue in the United States is still steadily increasing and remains the largest revenue source on the mobile platform. Assuming a revenue split of 10%:90% between mobile and web platforms, with a 10-20% increase in web platform revenue according to ST data and a 112% increase in mobile revenue in January, Kuaishou's revenue in January is expected to reach 24-26 million USD, a 20-30% increase from the previous month. With the new Kuaishou 3.0 version in internal testing, if released before the Chinese New Year, it is expected to spark a new wave of creative enthusiasm based on the popularity of the January product. Kuaishou 3.0 is currently in internal testing, with some expected iterations including: (1) Based on a unified multimodal training platform, it supports text-to-video, reference-to-video, and video editing integration, with flexible control over video length (3-15 seconds) and better integration of audio output for a more realistic feel; (2) Intelligent storyboarding with multiple camera angles, providing finer control over camera angles; (3) A key upgrade is the consistency of the main element, which locks in the core elements of characters or scenes to maintain consistency in details during camera movements and scene progressions, without deviation; (4) A differentiation is the "native text output" feature, as current video generation technology still struggles with clear and accurate text output, which somewhat limits workflow efficiency. If version 3.0 achieves a substantial breakthrough in text output, Orient predicts it will stimulate downstream demand. Risk factors: Macroeconomic consumption recovery is slower than expected, domestic commercial efficiency is lower than expected, overseas business losses increase, Kuaishou's technological iterations fall short of expectations.