The market is reacting to two things at once here:

1. the idea that Kuaishou Technology has a hidden AI asset the market wasn’t fully valuing, and

2.  possibility that a spin-off crystallizes that value in a cleaner “pure-play AI” structure.

The rumor/report is that Kling AI could be spun off at around a US$20B valuation.

That number is not crazy in the current China AI market context. Comparable Chinese AI names are now getting very aggressive private-market marks, especially anything tied to foundation models or video generation.

Based on the math, Kuaishou valuation has fallen to ~USD25B 

So if Kling alone is worth US$20B, the market is implicitly saying:

* the legacy short-video + ads + e-commerce business may only be worth ~US$5–10B net of AI spending pressure, OR

* the market has been massively underpricing the AI optionality.

That’s why the stock ripped ~20% in a few days already. Haitong explicitly said a spin-off could rerate Kuaishou toward HK$84/share and total valuation around HK$368.6B.

Here’s the accretion logic in simple terms:

* Current market view: “Kuaishou is a slowing short-video/e-commerce platform burning cash on AI.”

* Spin-off view: “Kuaishou owns a frontier AI video company that deserves OpenAI/Sora-style multiples.”

Those deserve radically different valuation frameworks.

The key unlock is that AI infra spending stops looking like a drag on consolidated earnings and starts looking like growth investment inside a separately valued AI company. That alone can expand multiples.

Prepare for a rerating and a spike tomorrow.

Target price $85-95 conservatively.