Core Viewpoint - The report from CMB International indicates that Kingsoft (03888) faced revenue pressure in Q2 due to high base effects from key games, leading to a decline in profit margins influenced by decreased revenue and increased costs related to AI investments and new game marketing [1] Group 1: Financial Performance - Kingsoft's game revenue and profit forecasts have been downgraded for the year, with the target price reduced from HKD 46 to HKD 42 while maintaining a "Buy" rating [1] - Initial data from the launch of "Limitless Machine" fell short of expectations, but it signifies progress in new categories and global expansion [1] Group 2: Business Segments - The office business continues to show robust growth, with AI monthly active users reaching nearly 30 million, a year-on-year increase of 50% [1] - Rapid growth is expected in the second half of the year, reinforcing Kingsoft's leading position in knowledge document office scenarios [1]

Core Viewpoint - The report from CMB International indicates that Kingsoft Corporation (03888) faced revenue pressure in Q2 due to high base effects from key games, leading to a decline in profit margins impacted by decreased revenue and increased costs related to AI investments and new game marketing [1] Group 1: Financial Performance - Kingsoft's game revenue and profit forecasts have been downgraded for the year, with the target price reduced from HKD 46 to HKD 42 while maintaining a "Buy" rating [1] - Initial data from the launch of "Limitless Machine" fell short of expectations, although it signifies progress in new categories and global expansion [1] Group 2: Business Segments - The office business continues to show robust growth, with AI monthly active users reaching nearly 30 million, a year-on-year increase of 50% [1] - It is anticipated that the office segment will continue to grow rapidly in the second half of the year, solidifying its leading position in knowledge document office scenarios [1]

Group 1 - The company's game business performance was below expectations, particularly the game "解限机," leading to a downward revision of revenue and net profit forecasts for 2025-2027 [1][2] - Revenue projections for 2025, 2026, and 2027 are estimated at 10.62 billion, 11.96 billion, and 13.38 billion yuan, reflecting year-on-year growth of 2.9%, 12.7%, and 11.8% respectively [1] - The company reported a Q2 2025 revenue of 2.307 billion yuan, which was below the Bloomberg consensus estimate of 2.456 billion yuan, representing a year-on-year decline of 6.7% [1][2] Group 2 - The company's net profit for Q2 2025 was 532 million yuan, showing a year-on-year increase of 35.4%, but operational profit was lower than expected at 383 million yuan [1][2] - The gross margin for Q2 2025 was 80.3%, down 2.2 percentage points year-on-year, attributed to reduced scale effects in the gaming sector and increased costs in WPS computing power leasing and bandwidth [1][2] - The WPS B-end business showed strong performance, with a year-on-year growth of 14%, and the AI monthly active users increased by 50% to 29.51 million [2]

Core Insights - The core issue highlighted is the underperformance of Xishanju Games, which has negatively impacted Kingsoft's revenue in the second quarter [1] Company Performance - Kingsoft's revenue declined due to the poor performance of its gaming segment, particularly Xishanju Games [1] - The company reported a revenue drop of 15% year-on-year, amounting to 1.2 billion yuan [1] - The gaming division's revenue fell by 25% compared to the previous year, contributing significantly to the overall decline [1] Industry Context - The gaming industry is facing challenges, with increased competition and changing consumer preferences affecting revenue streams [1] - The decline in revenue for Kingsoft reflects broader trends in the gaming sector, where companies are struggling to maintain growth [1]

Investment Rating - The report assigns a "Buy" rating for the company, Kingsoft (3888 HK), with a target price adjusted from HKD 46.00 to HKD 42.00, indicating a potential upside of 24.3% from the current price of HKD 33.80 [2][9][11]. Core Insights - The company's revenue faced pressure in Q2 due to a high base effect from key games, resulting in a 7% year-on-year decline. Game revenue specifically dropped by 26%, while the office software and services segment grew by 14% [6][12]. - The adjusted operating profit decreased by 48% year-on-year, primarily due to the decline in game revenue, increased marketing expenses for new games, and higher investments in AI [6][12]. - The AI monthly active users reached nearly 30 million, a 50% year-on-year increase, and is expected to continue growing rapidly in the second half of the year [6][12]. Financial Performance Summary - For 2025, the new revenue forecast is RMB 10,512 million, a 6% decrease from the previous estimate of RMB 11,184 million. The gaming segment's revenue is expected to be RMB 4,692 million, down 12% from the prior forecast [5][12]. - The gross profit is projected at RMB 8,652 million, reflecting a 7% decrease from the previous estimate, with a gross margin of 82% [5][12]. - The adjusted net profit for 2025 is forecasted at RMB 2,371 million, a 13% decrease from the previous estimate of RMB 2,724 million [5][12]. Q2 Performance Overview - In Q2 2025, the company's revenue was RMB 2,307 million, down 7% year-on-year, with game revenue at RMB 952 million, down 26% [7][12]. - The office software and services revenue was RMB 1,356 million, up 14% year-on-year, driven by strong performance in WPS 365 and personal business segments [6][7]. - The operating profit for Q2 was RMB 383 million, a 52% decline year-on-year, with an operating margin of 17% [7][12].

Core Viewpoint - Kingsoft's financial performance shows a mixed picture, with strong growth in office software and services but a significant decline in the gaming sector, impacting overall revenue [4][3]. Group 1: Financial Performance - For Q2 2025, Kingsoft reported revenue of 23.07 billion RMB, a decrease of 7% year-on-year and 1% quarter-on-quarter [4]. - Gross profit fell by 9% to 18.54 billion RMB, with a gross margin of 80%, down 3 percentage points year-on-year [4]. - Net profit attributable to shareholders increased by 35% to 5.32 billion RMB [4]. Group 2: Office Software and Services - Revenue from office software and services reached 13.56 billion RMB, representing a year-on-year growth of 14% and a quarter-on-quarter increase of 4%, accounting for 58.77% of total revenue [2][4]. - The growth in this segment is attributed to the performance of WPS 365 and personal WPS services, driven by product strength, high-quality service, and enhanced customer retention [2]. Group 3: Gaming Sector Performance - The gaming and other business segment generated revenue of 9.52 billion RMB, a significant decline of 26% year-on-year and 8% quarter-on-quarter, making up 41.26% of total revenue [3][4]. - The decline in gaming revenue is primarily due to underperformance of key titles such as "Dust White Zone" and "Jian Wang 3," which faced high comparative bases from the previous year [3]. - The gaming market, particularly for second-dimensional games, has been experiencing a downturn, with a reported 8% decrease in sales revenue for the first half of 2025 [5]. Group 4: AI and R&D Investment - Kingsoft's investment in AI is increasing, with R&D expenses rising by 18.7% to 9.59 billion RMB, representing 36.07% of revenue, an increase of 2.6 percentage points year-on-year [2]. - The company is focusing on AI integration across its office software components, which is seen as a key growth area in the industry [2].

Core Viewpoint - Kingsoft Software reported a decline in revenue for Q2 2025, with a total revenue of 2.307 billion RMB, a year-on-year decrease of 7% and a quarter-on-quarter decrease of 1% [1][2]. Revenue Breakdown - The revenue from the office software and services segment reached 1.356 billion RMB, representing a year-on-year growth of 14% and a quarter-on-quarter growth of 4%, accounting for 58.77% of total revenue [2][3]. - The revenue from the online gaming and other segments was 951.76 million RMB, showing a significant year-on-year decline of 26% and a quarter-on-quarter decline of 8%, making up 41.26% of total revenue [2][6]. Profitability - Gross profit for the quarter was 1.854 billion RMB, down 9% year-on-year, with a gross margin of 80%, a decrease of 3 percentage points compared to the previous year [1][2]. Growth Drivers - The growth in the office software segment was primarily driven by the performance of WPS 365 and personal WPS services, supported by enhanced product capabilities and AI features [3][5]. - As of June 30, 2025, WPS Office had 651 million monthly active devices, an increase of 8.56% year-on-year, with paid user numbers rising by 9.54% to 41.79 million [3][5]. Challenges in Gaming Segment - The gaming segment faced challenges, particularly with the performance of the games "Dust White Zone" and "Jian Wang 3," which saw significant revenue declines due to high comparative figures from the previous year [6][8]. - The overall decline in the online gaming segment reflects broader market trends, with the two-dimensional mobile game market experiencing an 8% drop in actual sales revenue in the first half of 2025 [9]. New Game Launches - The recent launch of the mech shooting game "Limitless Machine" has not met expectations, with a significant drop in player numbers shortly after release [9][13].

金山软件（03888.HK） 2025 年 08 月 21 日 投资评级：买入（维持） | 日期 | 2025/8/20 | | --- | --- | | 当前股价(港元) | 33.800 | | 一年最高最低(港元) | 47.500/19.740 | | 总市值(亿港元) | 473.34 | | 流通市值(亿港元) | 473.34 | | 总股本(亿股) | 14.00 | | 流通港股(亿股) | 14.00 | | 近 3 个月换手率(%) | 75.95 | 计算机/软件开发 股价走势图 数据来源：聚源 -40% 0% 40% 80% 120% 160% 2024-08 2024-12 2025-04 金山软件 恒生指数 相关研究报告 《WPS 变现能力仍有待观察，游戏业 务或实现高基数下的稳健增长—港股 公司信息更新报告》-2025.5.30 《游戏回归平稳增速，AI 驱动 WPS 及金山云增长提速 —港股公司信息 更新报告》-2025.3.23 《游戏显著超预期，WPS B 端迎复苏 拐点 —港股公司信息更新报告》 -2024.11.20 WPS B 端景气度较优，关注后续《解限机》优化 ...

Group 1: Hong Kong Stock Exchange Developments - Hong Kong Stock Exchange (HKEX) CEO Charles Li stated that HKEX will research a 24-hour trading mechanism, taking into account international experiences and local market conditions [1] - HKEX plans to enhance its competitiveness through strategic investments in data platform optimization and trading settlement system upgrades [1] - The exchange is also exploring shortening the settlement cycle for the cash market, with a potential T+1 settlement system supported by its technology by the end of this year [1] Group 2: Market Overview - The S&P 500 index fell for four consecutive days, with the index closing down 0.24% at 6395.78 points [2] - Major technology stocks mostly declined, with Intel dropping approximately 7% [2] - The Nasdaq China Golden Dragon Index rose by 0.33%, with notable gains from Tiger Brokers and JinkoSolar [2] Group 3: Financial Regulatory Updates - The National Financial Regulatory Administration is seeking public opinion on the draft of the "Commercial Bank M&A Loan Management Measures," which includes provisions for equity acquisition loans [3] Group 4: Federal Reserve Insights - The Federal Reserve's July meeting minutes indicated a moderate GDP growth in the first half of the year, with a focus on inflation risks over labor market concerns [4] - There was a notable dissent among Fed officials regarding interest rate decisions, marking a significant moment since 1993 [4] Group 5: Corporate Earnings Reports - Alibaba Group announced plans to spin off its subsidiary, Zhaima, for an independent listing on the Hong Kong Stock Exchange [5] - Baidu Group reported a total revenue of RMB 327.13 billion for Q2 2025, a year-on-year decrease of 4%, while net profit increased by 33% to RMB 73.22 billion [8] - Huazhu Group's total revenue for Q2 2025 was RMB 64.26 billion, with a net profit of RMB 15.44 billion, reflecting a 44.7% year-on-year increase [9] - China Oriental Group expects a net profit increase of no less than 70% for the first half of 2025, projecting at least RMB 2.20 billion [10] - Lijun Pharmaceutical reported a net profit of RMB 12.81 billion for the first half of 2025, a 9.4% increase year-on-year [11] - BOSS Zhipin reported a net profit of RMB 7.16 billion for Q2 2025, a 69.87% increase year-on-year [12] - New World Development reported a significant increase in net profit to HKD 887 million, a 1076% rise year-on-year [13] - Yimuyou Group expects a net profit of no less than RMB 2.6 billion for the first half of 2025, representing a growth of over 90% [14] - Yongsheng Medical reported a net profit of HKD 51.63 million, a 55.1% increase year-on-year [15] - Lepu Biopharma achieved a revenue increase of 249.59% for the first half of 2025, marking its first profit [16] - Huya Technology expects a net profit of USD 30 million to 38 million for the first half of 2025, a significant increase from the previous year [17] - Kingsoft reported a net profit of RMB 816 million for the first half of 2025, a 20.41% increase year-on-year [18] - Zhong An Online reported a net profit of RMB 668 million, a 1103.54% increase year-on-year [19] - Yaoshi Bang reported a net profit of RMB 78.12 million, a 258% increase year-on-year [20] - Crystal International reported a net profit of USD 98.27 million, a 17% increase year-on-year [21] - Ocean Group expects a turnaround with a projected net profit of RMB 9.5 billion to 11 billion for the first half of 2025 [22] - Kingsoft Cloud reported an adjusted EBITDA of approximately RMB 725 million, a 672.62% increase year-on-year [23] Group 6: Pharmaceutical Developments - Heyou Pharmaceutical's IND application for a combination therapy for NSCLC has been approved by the CDE [24] - Shengbela reported a net profit of RMB 327 million, marking a turnaround from a previous loss, with significant growth in various business segments [25]

Group 1 - The Hang Seng Index Company will announce the semi-annual review results of the Hang Seng series indices on August 22, 2025, with changes effective from September 8, 2025 [1] - Major brokerages, including UBS, Huatai Securities, and CICC, have released reports predicting adjustments to the Hang Seng Index, Hang Seng China Enterprises Index, and Hang Seng Composite Index [1][2] - CICC highlights the significant scale of passive funds tracking flagship indices, with ETF sizes for the Hang Seng Index, Hang Seng China Enterprises Index, and Hang Seng Technology Index being approximately $30.35 billion, $6.63 billion, and $26.12 billion respectively [1] Group 2 - Potential candidates for inclusion in the Hang Seng Index include Bank of Communications, Pop Mart, Yum China, XPeng Motors, Huazhu Group, JD Logistics, and Innovent Biologics [1][2] - UBS predicts that stocks likely to be included as blue-chip stocks are WuXi AppTec, Pop Mart, JD Logistics, Kingsoft, and Bank of Communications [2] - Historical data indicates that actual results of the Hang Seng Index's quarterly reviews may differ significantly from predictions based on market capitalization rankings [2] Group 3 - Companies such as Cao Cao Travel, InnoCare Pharma, and Chow Tai Fook are expected to be included in the Stock Connect list, which connects Hong Kong-listed companies with mainland investors [3] - CICC estimates that 19 stocks meet the criteria for inclusion in the Stock Connect, including Cao Cao Travel, InnoCare Pharma, and Nanshan Aluminum [3][4] - UBS forecasts potential additions to the Stock Connect list, including East Asia Bank, InnoCare Pharma-B, and Blue Moon Group [3] Group 4 - Huatai Securities also anticipates that 19 stocks may be added to the Stock Connect, including Yunzhisheng, Huiju Technology, and InnoCare Pharma-B [4] - Historical performance shows that newly included stocks in the Stock Connect tend to outperform the Hang Seng Index during the adjustment period, while stocks removed from the index face significant outflows [4]