Kuaishou Technology reported that its Kling AI video generation platform achieved monthly revenues exceeding US$20 million in December 2025, translating to an annualized run rate of US$240 million, according to Citigroup analysts who maintain a Buy rating on the Chinese short-video company.

The performance, which came in slightly ahead of analyst expectations, positions Kling as a significant revenue contributor for Kuaishou amid challenges in its core e-commerce business. Citigroup now projects Kling's full-year 2026 revenue could potentially exceed $250 million.

The December surge in revenue is attributed to the launch of Kling Video 2.6, which introduced a "motion control" feature that has gained popularity among creators of AI-generated video content in overseas markets. The new functionality marks a competitive advance in the rapidly evolving generative AI video sector.

Citigroup analysts Brian Gong and Alicia Yap highlighted the AI division's momentum as a counterbalance to headwinds facing Kuaishou's e-commerce operations. The firm maintains a target price of HK$88 for Kuaishou shares, representing a potential upside of 12.2% from the HK$78.45 close on January 13, 2026.

The Kling AI platform has emerged as a strategic diversification for Kuaishou as it competes against ByteDance's Douyin and Tencent's Video Accounts in China's crowded short-video market. The AI video generation tool has found particular traction in international markets, where demand for automated content creation continues to grow.

Citigroup's target price is based on 15 times the company's 2026 adjusted earnings per share forecast of HK$5.4, below Kuaishou's historical price-to-earnings average. The valuation reflects slower growth momentum in the company's gross merchandise volume and overall revenue compared to previous periods.

The analysts cautioned that risks to their outlook include intensifying competition from established rivals, slower-than-expected e-commerce growth, weaker margin expansion, potential regulatory challenges, and possible stake disposals by major shareholders. Despite these concerns, they view Kling's performance as providing sufficient support for their positive rating on the stock.

Kuaishou's market capitalization stood at HK$342 billion (US$43.9 billion) as of the report date. The company continues to balance investments in emerging AI technologies while managing its core short-video and live-streaming businesses.