Kuaishou plans to spin off Kling AI for Hong Kong IPO, valuing it at US$20 billion

Kuaishou (1024) aims to spin off its video generation model, Kling AI, with a target valuation of US$20 billion (HK$156 billion) and plans to launch an initial public offering next year.

The valuation is based on a forecast of next year's first-quarter annual recurring revenue, which could reach US$1.3 billion.

Kuaishou once rose as much as 11 percent to HK$57.4 on Tuesday, but it closed at HK$52.6, up 1.94 percent. 

It was reported that by the end of April, Kling AI's annual recurring revenue was US$500 million, more than double its previous level before February. 

Kling AI plans to raise US$2 billion and is currently in talks with investors for its pre-IPO fundraising, including Tencent (0700), but no deals have been finalized.

Morgan Stanley noted that if the spin-off is ultimately realized, it could unlock considerable value for Kuaishou, since the market generally gives higher valuation multiples to pure-play AI companies.
 

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