According to Citigroup, the penalty imposed by the Beijing Cyberspace Administration on KUAISHOU-W is within a controllable range, maintaining a "Buy" rating

Citi's research report pointed out that the Beijing Cyberspace Administration imposed a warning and a fine of RMB 119.1 million on KUAISHOU (01024.HK) for failing to fulfill its cybersecurity protection obligations, not taking timely measures to stop the dissemination and remove inappropriate content in its live streaming business, and ordered it to rectify its operations within a specified period.

Citi believes that the related fines are manageable for KUAISHOU, and the rectification requirements have limited (if any) operational impact on its live streaming and e-commerce businesses, which suggests that regulatory scrutiny may have reached a conclusion; although there remains some uncertainty regarding the e-commerce business due to value-added tax and traffic advertising expenditure policies. Given KUAISHOU's Kecai AI has good potential, it maintains a "Buy" rating on KUAISHOU with a target price of HKD 95