Haitong International believes that the potential spin-off of Kling by KUAISHOU is likely, which has led to a 20% increase in KUAISHOU's share price. The broker cites four reasons for this optimism: Kling may be undervalued due to KUAISHOU's slowing growth; a spin-off could enhance Kling's financing options and reduce KUAISHOU's AI capital expenditure burden; easing capital expenditure pressure could support the recovery of KUAISHOU's traditional business valuations; and the spin-off would help retain top talent. They estimate that if the spin-off occurs, KUAISHOU's share price could reach HKD84, with an overall valuation of HKD368.6 billion.
