Kuaishou Technology: Kling AI gains popularity overseas. Reiterate positive view on Kuaishou as one of the cheapest AI stocks globally
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JPMorgan reiterates its Overweight rating on Kuaishou Technology (1024.HK) with a December 2026 target price of HK$89.00, based on 14x 2026E P/E, representing 22% upside from the current HK$73.60 share price. The firm views Kuaishou as one of the most undervalued AI stocks globally, trading at just 12x 2026E P/E against a 21% earnings CAGR for 2026–27.
Kuaishou shares surged 11% on January 5, 2026, driven by Kling AI's strong overseas momentum. Daily mobile revenue grew 102% during January 1–3 versus December 2025 averages, fueled by a viral pet-dancing video trend. Kling AI ranked as the top downloaded app in four markets including South Korea and Turkey, with revenue in Korea up 13x month-over-month. Over the past 90 days, the United States accounted for 31% of revenue, followed by the UK at 9%.
JPMorgan projects Kling AI revenue to reach RMB1.7 billion in 2026, up 62% year-over-year. The global AI video generation TAM stands at $140 billion. Beyond Kling, AI-driven improvements in advertising technology are benefiting core app monetization, contributing 4–5% positively to 3Q25 ad revenue.
The firm expects 2026 adjusted net margin to expand 1.4 percentage points and forecasts earnings growth of 20%/23% for 2026/27, running 8% above consensus for 2026. Capital expenditure guidance was raised to RMB14 billion for 2025, primarily supporting Kling and advertising technology infrastructure.