Kuaishou's stock price plummeted over 14%, with a total market capitalization now less than HKD 200 billion.

Kuaishou (01024.HK), with a profit of 20 billion yuan, cannot buy a growth story, as its stock price plummeted after the earnings release.

On March 26, in the Hong Kong stock market, Kuaishou, which disclosed its earnings, opened down over 9% and then quickly fell further, closing down 14.04%, with a total market value of less than 200 billion Hong Kong dollars.

On the evening of March 25, Kuaishou Technology released its earnings for the fourth quarter and the whole year of 2025. The financial report showed that in the fourth quarter of 2025, Kuaishou’s total revenue increased by 11.8% year-on-year to 39.6 billion yuan, with an adjusted net profit of 5.5 billion yuan, up 13.8% year-on-year. For the entire year of 2025, revenue was approximately 142.8 billion yuan, a year-on-year increase of 12.5%; annual profit was about 18.6 billion yuan, up 21.4%; and the adjusted net profit for the year was approximately 20.6 billion yuan, an increase of 16.5% year-on-year.

According to the financial report, online marketing services revenue remains the core engine driving Kuaishou’s revenue, accounting for 57% of total revenue, increasing from 72.4 billion yuan in 2024 by 12.5% to 81.5 billion yuan in 2025. Kuaishou stated that this was mainly due to the accelerated penetration and innovative application of AI in various scenarios of online marketing services.

Kuaishou’s CFO Jin Bing stated that in 2026, Kuaishou expects the group’s overall capital expenditure (Capex) to reach approximately 26 billion yuan, an increase of about 11 billion yuan compared to 2025. These investments include computing power for large generative AI models and other foundational models, as well as routine server procurement costs such as offline data storage processing and data/computing center construction projects.

Regarding this financial report, Huatai Securities believes that Kuaishou’s fourth-quarter data slightly exceeded expectations, but in the context of live content regulation in 2026, the growth rate of commission and advertising revenue significantly slowed (small and medium-sized businesses are under pressure with weaker resilience), while profits fell year-on-year due to AI investments (depreciation and salary costs).

Nomura analysts stated in a research report that Kuaishou may face profit pressure. Nomura indicated that Kuaishou’s earnings outlook for 2026 is weak, with revenue growth of about 4% and adjusted net profit declining by 15%-18%, all below market expectations. The firm expects that weak advertising momentum and increased AI capital expenditures will put pressure on profit margins. They stated: “We believe that increasing AI capital expenditure is the right move for Kuaishou, but we worry that this is just the beginning of a new investment cycle that may persist beyond 2026.” Nomura downgraded Kuaishou’s rating from Buy to Neutral and lowered its target price from 77 Hong Kong dollars to 57 Hong Kong dollars.

Morgan Stanley published a research report, reducing its earnings per share forecast for Kuaishou from 2026 to 2028 by 17% to 24%, with its target price lowered from 73 Hong Kong dollars by 25% to 55 Hong Kong dollars, maintaining a rating of “In Line with the Market.” Morgan Stanley stated that increasing investment in AI is common among Chinese tech stocks, but the significant slowdown in total revenue (especially in online marketing) raises concerns about investment returns.