The analyst rating for KUAISHOU-W (01024.HK) was maintained at "Buy" by UBS due to several positive developments regarding its Kling AI app. The reasons for this rating include:
1. Significant User Growth: Kling AI's paying user scale grew by about 3.5 times month-over-month since January 2026, indicating strong demand and user acquisition.
2. Increased Revenue: The average daily revenue levels for Kling AI increased by approximately 30%, reflecting effective monetization strategies.
3. Rising Monthly Active Users: The app's monthly active users have surpassed 12 million, driven by product iterations, which suggests that the app is becoming more appealing to users.
4. Market Potential: UBS estimates that the global potential market user base for video generative AI could reach 90-140 million, with substantial annual revenue potential, indicating significant growth opportunities.
5. Lower Market Penetration: The current lower market penetration rate suggests that Kling AI has larger growth potential ahead.
6. Revised Financial Projections: UBS raised its 2026 revenue forecast for Kling AI to RMB2.3 billion, further supporting the positive outlook.
Based on these factors, UBS raised its target price for KUAISHOU-W from $95 to $108, reinforcing their bullish stance on the stock.
