On August 24, KUAISHOU-W declined 3.08% in regular trading, trading at HK$33.36/share with turnover of HK$521 million, extending post-earnings weakness following the Q2 results released on August 19.

The Q2 report showed total revenue of RMB 35.535 billion, up only 1.4% YoY, while adjusted net profit fell 30.3% YoY to RMB 3.913 billion. The profit decline was primarily driven by a 34.7% YoY surge in R&D expenses to RMB 4.6 billion, reflecting intensified AI investment including model training costs. While Kling AI revenue exceeded RMB 850 million with over 200% YoY growth, live-streaming revenue declined 13.5% YoY and advertising revenue of RMB 20.6 billion came in below the market consensus of RMB 21.3 billion.

Despite the company repurchasing approximately HK$449 million worth of shares over two trading days following the earnings release, market concerns over weakening traditional business growth and near-term profit compression from the AI investment cycle continue to weigh on the stock. Daiwa Securities downgraded the stock to Hold from Buy, while CICC cut its FY26/27 Non-IFRS net profit estimates by 49%/39%.

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