By Sherry Qin
Kuaishou Technology's shares rose sharply after its video-generation tool Kling AI significantly ramped up revenue with vast market potential ahead.
Shares of the Beijing-based company rose 6.1% to 83.25 Hong Kong dollars, equivalent to US$10.67, in early Wednesday trading.
Monthly revenue of Kuaishou's Kling exceeded US$20 million in December, the company said Tuesday. Kuaishou said that implied an annualized revenue run rate of US$240 million, up sharply from a rate of US$$100 million last March.
Even taking into account expectations of a strong performance by Kling, monthly revenue was still slightly ahead of Citi's forecasts, and points to a solid revenue outlook for 2026, the bank's analysts said in a note.
Kuaishou, China's second-largest short-video platform after TikTok's sister app Douyin, has turned to artificial intelligence in recent years as competition in the short-video industry heat up. Its AI efforts have largely centered on Kling, which it hopes will help creators and businesses produce more attractive and engaging content and ads.
Kuaishou raised its 2025 revenue guidance for Kling to US$140 million from US$100 million, after the product booked revenue of 300 million yuan, equivalent to US$43 million, in the third quarter.
Kling launched a new model in early December that can generate videos with speech, sound effects and ambient sounds all at once. A new function, dubbed "motion control," enables precise control of character actions and expressions from a reference image, and has gained traction in overseas markets.
Analysts have pointed to the vast market potential of AI video generation, with applications across sectors including movies, animation and advertising.
Kling's success has sent Kuaishou's shares up around 30% since the beginning of 2026.
Separately, Kuaishou said early Wednesday that it plans to issue yuan- and U.S. dollar-denominated senior notes. While the note's terms haven't been determined, the company plans to use the proceeds to meet general corporate needs.
Fitch Ratings rated Kuaishou's proposed senior notes at A-, saying it expects the company to maintain strong positions in short-video, live-streaming and content-based e-commerce services in China.
However, Kuaishou's relatively short record of profitable growth is weighing on its ratings, especially given fierce competition in China's rapidly evolving internet sector, Fitch said.
Write to Sherry Qin at sherry.qin@wsj.com
(END) Dow Jones Newswires
January 13, 2026 22:22 ET (03:22 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
