【1024】Kuaishou’s KeLing restructures, bringing in more than 19 billion yuan in funding; Tencent, Alibaba, and Baidu co-invest; valuation set at $15 billion

Kuaishou (01024) announced that its model-large-model business subsidiary responsible for “Kling AI” — Beijing Keling — will undergo a restructuring and introduce external financing of RMB 13.8 billion (the same below), while adopting a share participation plan for its subsidiaries and introducing different voting rights structures.

A total of 21 initial investors agreed to inject a combined cash amount of RMB 13.8 billion, provided that the total agreed capital increase amount shall not exceed RMB 20.45 billion. On the same day, 15 additional investors signed joinder agreements, agreeing to inject a combined RMB 5.22 billion.

After reviewing market comparable companies and industry indicators for analysis, management set Beijing Keling’s pre-transaction valuation at $15 billion, which is reasonable from a business perspective.

Assuming the subscription cap and the incentive plan are fully utilized, Kuaishou’s equity interest in Beijing Keling will be diluted from 100.00% to approximately 68.33%, i.e., it is deemed to be the disposal of approximately 31.67% of the equity interest. Beijing Keling will remain a subsidiary of Kuaishou, and its financial performance will continue to be consolidated into Kuaishou’s financial statements.

Beijing Keling mainly engages in the development and operations of the globally leading video generation large model “Kling AI” developed through independent research and development. For the fiscal year ended December 2025, Beijing Keling’s revenue was approximately RMB 1.1 billion. In March 2026, Kling AI’s annualized revenue run-rate has reached approximately $500 million. The unaudited net losses for 2024 and 2025 were RMB 500 million and RMB 1.9 billion, respectively.

Kuaishou said that the group will gradually integrate Kling AI-related assets and business into Beijing Keling, and will transfer assets that, after the restructuring, are not part of its principal businesses to other designated entities within the Kuaishou group. The completion of the restructuring is expected to be implemented within 9 months after the latest payment date under the capital increase agreement.

Among the investors are several Kuaishou-related parties, including Party A (a company controlled by Ms. Lu Rong, an independent non-executive director), Party B (a company ultimately controlled by Tencent, the controlling shareholder), Party C (a company wholly owned by Mr. Zhang Fei, an independent non-executive director), and Party D (a company controlled by family members of Mr. Yang Yuanxi, a director of the subsidiary).

The other 34 independent investors include well-known technology and institutional investors such as Hangzhou Alibaba Cloud, Beijing Baidu Netcom, China Internet Investment Fund, and Shanghai Guofang Data.