Maintain a "buy" rating for KUAISHOU-W (01024) with a target price of 103.06 Hong Kong dollars.

Orient Research report predicts that Kuaishou-W (01024) will have an adjusted net profit attributable to shareholders of 20.4/22.5/25.9 billion yuan for the years 2025-2027. They maintain a 26-year 18xPE valuation for the company, with a fair value of 404.8 billion CNY, equivalent to 445.4 billion HKD (at an exchange rate of 0.909 HKD to CNY), and a target price of 103.06 HKD per share, maintaining a "buy" rating. Kelian released the O1 model, which integrates video generation, editing, and extension into a unified model, helping professional creators improve efficiency. The breakthrough innovation lies in the ability to modify a single element within a video, similar to the "Video version of Nano Banana." They see strong demand accelerating penetration and increasing revenue. The firm believes that the highlights of Kelian's O1 update are: (1) O1 is a unified multimodal video model that can complete all creation tasks of generation-modification-extension in one go by blending video reference, content editing, style re-drawing, and shot extension into one unified model; (2) Deep semantic understanding capability can accurately generate various details of videos based on uploaded videos, images, and subjects; (3) It directly solves the backend video consistency issue, maintaining stable subject features in multi-angle image creation and shot transitions; (4) It supports 3-10 second free narratives to meet different creation needs. The firm believes that this update has no comparable products in the market, with significance in both iterating on Kelian's ability to meet professional creators' needs and lowering the entry barrier to further expand user reach. Specifically: 1. The flexibility and convenience of professional B-end creation have been significantly enhanced, with the MVL (Multi-modal visual language) concept productized to support multimodal descriptions such as videos, images, and objects, making creator intent expression and interaction more efficient. Previously, Nano Banana focused on ensuring consistency in frontend image generation, while Kelian O1 directly addresses the backend video consistency challenge, significantly improving creative flexibility at the single-element level and further assisting in improving efficiency. 2. Lower entry barriers further accelerate user penetration, with increased playability on the C-end, expanding the audience range for AI video models. In addition to lowering the threshold for professional B-end creation, the freedom of duration, simple prompts, and the ability to easily replicate popular videos augment the accessibility of Kelian models for the C-end.