HSBC Research lowers Kuaishou target price to HK$45 and maintains Buy rating

Summary

HSBC Research slashed Kuaishou’s (01024.HK) target price by 30.8% to HK$45, citing macro headwinds and rising merchant compliance costs that have pushed recovery expectations to H1 2027 AASTOCKS. While maintaining a ‘Buy’ rating due to valuation support from buybacks and the potential of Kling AI, the bank cut 2026-2028 profit forecasts by 50-60% AASTOCKS. This follows similar cautious moves from Goldman Sachs and a downgrade to ‘Hold’ by Daiwa .

Impact Analysis

HSBC’s move feels like a classic ‘kitchen-sink’ revision. When you slash profit forecasts by 50-60% AASTOCKS, you’re essentially admitting the previous bull case is dead. The ‘Buy’ rating is now purely a valuation play anchored by buybacks rather than a growth thesis. The most telling detail isn’t just the macro weakness, but the ‘rising merchant compliance costs’ AASTOCKS—this suggests the e-commerce engine is hitting structural friction that won’t vanish even if the economy picks up.

With Daiwa already downgrading to ‘Hold’ and recovery pushed way out to 2027, the market is effectively treating 2026 as a lost year. The mention of Kling AI as a catalyst feels like grasping at straws to justify staying long AASTOCKS. The real signal here? The floor is still being tested. Everyone is focused on the 40% YTD drop, but with earnings power halved, the ‘cheap’ valuation is a mirage until we see if the H2 downside pressure Daiwa warns about stabilizes. I’d stay sidelined; there’s no rush to catch this falling knife when the turnaround is 18 months away.