Kuaishou is an attractive asymmetric buy; core business undervalued relative to cash flow and Kling AI value not reflected in price, with Kling separation a potential catalyst.

Another Chinese internet company, Kuaishou. I made a video 7 months ago when Barry was buying it for 66. The stock price is now at 30. It is the second largest short video platform in the world after TikTok. It has 400 million daily users, and an average of 800 million monthly users . It is a highly profitable company , with a price-to-earnings ratio of seven, and furthermore, it owns "Kling AI," which is losing money, but is growing at a rate of 200% annually and is used by everyone. This puts pressure on profit margins, but the company remains profitable. They just raised $2.8 billion at an $ 18 billion valuation for Kling AI, which is supposed to go public next year, and they still own 68% of the company. That is equivalent to 12 billion. Compare that to the market value, and that's in Hong Kong dollars. You are paying 4 billion for 1 billion in cash flow from the core business. This is what you get where companies like Alibaba and Tencent invest. So, there's definitely something wrong here. Who is at fault? Is it excessive enthusiasm for artificial intelligence or the cheapness of video production? Because Kling AI is growing, yes, it requires a lot of investment and everything, but if it goes public, and if the AI and these models—which are constantly being released— actually work, and Hollywood uses them, then revenues will flourish. If artificial intelligence succeeds , it will be extremely valuable. But if you separate the core business, its costs will be much lower, and it will be much more profitable, with a price-to-earnings ratio of just 10.5 billion. That alone equals 15 billion. Adding the 15 billion to Kling, that equals 30 billion. This is much more than what we are currently trading. So, the main question is, I look at this and at artificial intelligence, everyone loves artificial intelligence and models and they simply pay money for it. Then you get it here for free. Who is the madman in this world ? Let me know in the comments below. People might say, "Yes, it will go public at 400 and then after 6 years it will trade at 30 like Kuaisho." Well, then you'd be crazy to invest 3 billion in things like that . Given the accumulated value, this is a bet with both risks and positive returns. The separation from the parent company could be a catalyst in 2027. If they can lead as a low- cost Chinese platform for AI- powered video editing, whatever they offer. If you want to bet within your portfolio, this is something worthwhile.