【01024】Morgan Stanley: If Kuaishou spins off Kuaishou Technology, each share is valued at 68 yuan; Citigroup expects Kuaishou Technology to be upgraded on or before June 6.

Kuaishou (01024)
Indicates that, in order to further utilize external financial resources, it is evaluating a proposed restructuring plan for KeLing AI’s related assets and businesses, which may involve introducing external financing. Citibank pointed out that considering Kuaishou’s leading position in the industry and the strong market demand for artificial intelligence (AI), it is not surprising that Kuaishou has plans to spin off and unlock the value of KeLing, which also explains the reason for Kuaishou’s stock price increase last week.

Citibank believes that KeLing will reach an annual recurring revenue of about $1.3 billion in the first quarter of 2027, which is considered overly aggressive compared to the $300 million annual recurring revenue in January 2026. However, according to Sensor Tower data, the growth rate of KeLing mobile revenue has accelerated recently, mainly driven by the U.S. market, and the next upgrade is estimated to occur on or before June 6. Citibank has a “Buy” rating for Kuaishou, with a target price of HKD 72.

Spinning off KeLing will unlock significant value for Kuaishou

Morgan Stanley stated that if KeLing’s annual recurring revenue reaches $1 billion by the end of the year, with a price-to-sales ratio of about 20 times, the valuation would be approximately $20 billion. In comparison, the peer Minimax (00100) has a price-to-sales ratio of about 30 times, and Zhipu (02513) has a ratio of about 60 times, both of which are higher than KeLing’s valuation.

“Recently, Kuaishou’s performance has outperformed the Hang Seng Index. If the spin-off of KeLing is ultimately completed, it will unlock huge value for Kuaishou, as the market generally assigns higher valuations to pure AI companies.”

Morgan Stanley said that if the firm assigns a forecasted 2026 P/E ratio of about 8 times to Kuaishou’s core business, and uses a valuation of $20 billion for KeLing, the per-share value of Kuaishou would be about HKD 68. Currently, Kuaishou’s market capitalization is roughly equivalent to a 5-times forecasted P/E ratio for 2026. Morgan Stanley maintains a “Market Perform” rating for Kuaishou, with a target price of HKD 55.

Open market trading for calls and puts

Global focus on the “Xi-Trump Meeting”—Will the stock market fully activate? Will Hong Kong stocks still rely on Alibaba and Tencent’s earnings?