快手科技（1024 HK）：买入：AI带来惊喜，核心业务前景保持稳定

Disclosures & DisclaimerThis report must be read with the disclosures and the analyst certifications inthe Disclosureappendix, and with the Disclaimer, which forms part of it.MDDI (P) 005/01/2025 MDDI (P) 006/09/2024 MDDI (P) 004/10/2024 MDDI (P) 020/10/2024Kling AI monetization surprised on the upsideAds and e-commerce outlook remainsunchangedMaintain Buy and TP at HKD75Ads outlook turns morecertain:Kuaishou Technology (KS) reported in-line1Q25results. We turn more confident that its core business can meet 2025 growthassumptions, especially for ad which we estimate to grow 14% y-o-y versus 8% in1Q25. AI aside, external performance adsbusinessis expectedto remain a key driverfor overall ad growth in 2025 backed by content consumption verticals and localservice ads which already delivered strong growth in 1Q25. Close-loop ads growthcan also become a driver into 2H25 as shelf-based E-commerce (EC)ad monetizationramps up and SME merchants better embrace AI-driven and more efficient adplacement tools. Separately, we lift topline growth assumption for Kling AI which weexpect tohit USD100m/RMB735m in 2025 (vs. USD60m/RMB440m previously) given1Q25 run rate beat on faster-than-expected user growth. We keep estimates and TPunchanged and retain our Buy rating. Valuation is undemanding at 10x 2025e PE.Revenue upside from Kling AI contribution and AIGC ad material are potentialcatalysts. KSstill has HKD12.1bn (i.e. 6% of market cap) left in the buyback program,buffering share price volatility.Kling AI update:Revenue reached RMB150m+ in 1Q25, ahead of our priorexpectation of RMB67m, withthe number ofpaying users growing rapidly despitelimited promotion and monthly ARPPU at USD20-30.Professional user subscription(To-PU)contributes 70% of revenue, and 30% comes from API services offered tomore than10,000 corporatecustomers (To-B).Overseas market contributes70% ofrevenue,while30%comesfrom China;we think this isafavorable mix to furtherramp up monetization. Kling AI has accumulated 22m users globally. We expectpaying users to remain the keydriver. Kling AI has already achieved positive grossprofit (i.e. revenue minus payment processing cost and inferencing cost). In ourSOTP scenario cross check on valuation, we estimate Kling AI could contributeHKD11 per share at 60x 2025ePS.Overseas update:The business turned profitable for the first time in 1Q25, ahead ofour expectation, due tocost optimization in headcounts and data centers. Meanwhile,ad revenuegrowthremains strong, and Brazil e-commerce orders grew well y-o-y onrigorous ROI management. DAU and time spent grew y-o-y, reflecting better trafficacquisition and optimization. We now expect overseas businesstobe slightlyprofitable in 2025.1Q25 largely inline:1)EC: Shelf-based GMV contribution reached 30%, implyinglive-streaming EC GMV was up 8%y-o-y. 2)Ads: Content consumption ad spend(e.g. mini games (30%y-o-y), short play (doublingy-o-y)), and local services (over50%y-o-y) drove external ads to grow at high-single-digit growth rate, ahead ofmid-single-digit growth rate for close-loop ads. Details on p.5-6.Kuaishou Technology(1024 HK)Buy:AI surprised, core business outlookstaysstable Find out morePREVIOUS TARGET(HKD)75.00UPSIDE/DOWNSIDE+54.6%172,696Free float66%22,038BBG1024 HK392RIC1024.HK12/2024a12/2025e12/2026e12/2027e4.024.565.756.904.024.525.746.880.00.90.24.044.625.616.3811.19.87.70.00.00.04.93.82.331.929.430.228.233.0056.5080.0011/2405/25High: 66.35 Low: 38.15 Current: 48.50 ◆◆◆ 2Financial statementsYear to12/2024a12/2025e12/2026e12/2027eProfit & loss summary(CNYm)Revenue126,898141,926155,624166,763EBITDA22,42725,71132,03238,379Depreciation & amortisation-7,140-7,069-7,338-7,837Operating profit/EBIT15,28718,64224,69430,543Netinterest236344388434PBT15,49418,99225,10831,022HSBC PBT17,87521,89228,37034,513Taxation-150-1,671-2,511-3,102Net profit15,33517,31322,58827,911HSBC net profit17,71620,21325,85031,402Cash flow summary(CNYm)Cashflow from operations29,78725,14836,94137,764Capex-8,063-5,777-7,882-8,440Cash flow from investment-36,687-5,777-7,882-8,440Dividends0000Change in net debt-1,359-12,776-23,405-29,324FCF equity21,74119,37229,05929,324Balance sheet summary(CNYm)Intangible fixed assets1,0591,0701,0801,091Tangible fixed assets23,72223,74024,85325,316Current assets62,86975,472100,792129,618Cash & others24,26637,04260,44789,771Total assets139,873152,504178,948208,248Operating liabilities66,73665,81672,12870,091Gross debt0000Net debt-24,266-37,042-60,447-89,771Shareholders' funds62,00475,54795,669126,996Invested capital-3,352-2,576-5,850-3,837Ratio, growthand per share analysisYear to12/2024a12/2025e12/2026e12/2027eY-o-y % changeRevenue11.811.89.77.2EBITDA64.514.624.619.8Operating profit137.721.932.523.7PBT124.922.632.223.6HSBC EPS73.913.426.219.9Ratios (%)Revenue/IC (x)349.6-47.9-36.9-34.4ROIC4198.9-574.3-527.5-567.5ROE31.929.430.228.2ROA12.511.813.614.4EBITDA margin17.718.120.623.0Operating profit margin12.013.115.918.3EBITDA/net interest (x)Netdebt/equity-39.1-4