<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/c5409681-f3b5-4e34-abc6-23652732e611.jpeg?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/c5409681-f3b5-4e34-abc6-23652732e611.jpeg"/> Author | Huang Yu
Editor | Wang Xiaojun
More than two years after the wave of large AI models began, AI application companies are finally starting to see returns on their substantial investments, and it's no longer just the &#34;shovel sellers&#34; making money. KUAISHOU, which has been listed for over four years, has also become prosperous under the drive of AI.
As one of the two major short video giants that is publicly listed, KUAISHOU has decided to distribute dividends for the first time. On August 21, KUAISHOU Technology released its performance announcement for the second quarter of 2025, while also announcing the distribution of its first special dividend since going public, amounting to HKD 0.46 per share, totaling approximately HKD 2 billion.
Behind KUAISHOU's dividend is its unexpectedly strong performance in the second quarter. The financial report shows that in the second quarter, KUAISHOU's revenue grew by 13.1% year-on-year to RMB 35 billion (all figures are in RMB), achieving the highest year-on-year growth rate in revenue in five quarters; adjusted net profit increased by 20.1% year-on-year to RMB 5.6 billion, setting a historical high.
At the same time, KUAISHOU's gross margin and adjusted net profit margin both broke historical peaks, reaching 55.7% and 16%, respectively.
AI has become the biggest contributor to KUAISHOU's unexpectedly strong performance.
At the earnings conference, KUAISHOU CFO Jin Bing stated that KUAISHOU has happily seen the significant role AI plays in improving quality and efficiency within the company, and the value of AI in KUAISHOU's content and commercial ecosystem is gradually being released, especially the rapid progress of KuaLing AI in commercial revenue.
According to the financial report, as KUAISHOU's current flagship AI application, the AI video generation platform—KuaLing AI has experienced rapid commercial growth, with revenue exceeding RMB 250 million in the second quarter of this year.
Since its launch in June last year, KuaLing AI has maintained a high-speed iteration, and previously, KuaLing also launched the 2.1 series model, significantly improving generation speed.
Data shows that as of July this year, KuaLing AI has produced over 200 million videos and 400 million images, serving over 20,000 enterprise clients. It has now formed a multi-platform product matrix including App, Web (Chinese and English versions), and KUAISHOU's internal mini-programs, becoming a one-stop AI productivity engine.
Jin Bing revealed that KuaLing's expected full-year revenue for 2025 is projected to double compared to the initial target set at the beginning of this year, which strengthens KUAISHOU's determination to make long-term investments in KuaLing AI.
It is reported that based on business development needs, KUAISHOU also increased its investment in KuaLing AI's inference computing power in the middle of this year, which is expected to double the Capex (capital expenditure) related to KuaLing AI for 2025 compared to the initial budget.
Notably, Jin Bing pointed out that since KuaLing AI has already achieved a positive gross margin at the inference computing power level, and KUAISHOU maintains product iteration and upgrades, the gross margin of KuaLing AI at the inference level remains relatively stable. Therefore, the additional investment in inference computing power still has a controllable impact on the group's profits.
Based on this good performance, Jin Bing stated: &#34;We expect the overall impact of the group's AI investment on the annual profit margin to remain at around 1-2%, which means that despite increasing our investment in AI, we are still confident in achieving our goal of maintaining a stable year-on-year adjusted net profit margin for the entire year.&#34;
Looking ahead to the medium and long-term development, KUAISHOU believes that there is still room for further reduction in the unit training costs and inference costs of Keling, and with the continuous release of AI's empowering value to content and the business ecosystem, it believes that incremental investment in AI can bring sustainable performance growth opportunities for the company's development.
Like many internet companies, KUAISHOU is firmly advancing its AI strategy.
Since 2023, KUAISHOU has fully launched its AI strategy, successively introducing a matrix of large models including the Kuaiyi language model, Ketu image generation model, Keling video generation model, and OneRec end-to-end generative recommendation model, as well as AI business application products such as Magnetic Innovation, Nuwa Digital Human, Digital Employee π, and UAX fully automated delivery, forming a complete artificial intelligence ecological layout.
While accelerating the iteration of Keling AI to seek commercial breakthroughs, KUAISHOU is also actively promoting the deep integration of AI technology with existing businesses.
In this context, in the second quarter of this year, KUAISHOU's total traffic reached a new high, with an average daily active user count of 409 million, a year-on-year increase of 3.4%, and an average monthly active user count of 715 million, a year-on-year increase of 3.3%, with total user usage time increasing by 7.5% year-on-year.
As KUAISHOU's main source of income, online marketing services achieved revenue of 19.8 billion yuan in the second quarter, a year-on-year increase of 12.8%, with the growth rate improving compared to the first quarter, accounting for approximately 56.4% of total revenue.
In the financial report, KUAISHOU specifically emphasized the driving effect of AI on marketing services, including tapping into incremental budgets across various industries and optimizing intelligent marketing product solutions using AI large model technology, achieving good progress in AIGC marketing material generation, marketing bidding, and marketing recommendations.
KUAISHOU founder and CEO Cheng Yixiao stated: &#34;In the second quarter of 2025, our AI large model capabilities will be applied to numerous ecological scenarios on the platform, not only improving the operational efficiency of merchants and influencers but also providing creators with a more immersive creative experience.&#34;
In this global AI arms race, KUAISHOU has also reached a key node for value reassessment.
JP Morgan is very optimistic about KUAISHOU, recently publishing a research report stating: &#34;KUAISHOU remains the most undervalued AI stock.&#34;
In this context, JP Morgan significantly raised KUAISHOU's target price from HKD 71 to HKD 88, representing an upside potential of 22%, and reiterated KUAISHOU as the preferred stock in China's digital entertainment sector. JP Morgan emphasized that KUAISHOU &#34;is not just about (AI large model) Keling,&#34; as its core advertising business growth is accelerating and the boost from artificial intelligence to advertising is also underestimated.
Analysts at Huatai Securities set KUAISHOU's target price at HKD 85.28, stating that the main reason for the valuation adjustment is that Keling is expected to contribute more revenue growth in the long term.
The capital market is also very optimistic about KUAISHOU. As of the close on August 22, KUAISHOU's stock price was approximately HKD 74.9, with a cumulative increase of over 80% this year.
Driven by AI, KUAISHOU has found its new development rhythm, but to stand at the center stage in the future, it will inevitably need to overcome many difficulties

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AI has become the biggest contributor to KUAISHOU's performance exceeding expectations

- Kuaishou has announced its first special dividend of HKD 0.46 per share, totaling approximately HKD 2 billion, following strong Q2 2025 results driven by AI advancements.  
- The company's revenue grew by 13.1% year-on-year to CNY 35 billion, with adjusted net profit rising 20.1% to CNY 5.6 billion, marking record highs.  
- Kuaishou's AI applications, particularly the Keling AI video generation platform, have significantly contributed to its performance, with expectations for continued growth and investment in AI technologies.

AI generates revenue, KUAISHOU-W announces its first dividend