Zhi Tong Cai Jing·2025-11-20 03:23Core Viewpoint - Daiwa Capital Markets maintains a "Buy" rating for Kingsoft Corporation (03888) with a slightly lowered target price of HKD 44, expressing cautious optimism regarding the company's online gaming revenue growth in Q4 [1] Revenue Forecast - The revenue forecast for Kingsoft's Q4 has been reduced by 3% due to weak online gaming revenue and uncertainties regarding the monetization of new games, while the revenue forecast for next year remains unchanged [1] - The adjusted net profit forecast for Q4 has been lowered by 6% to reflect increased investments in AI [1] Financial Performance - Kingsoft's Q3 2025 performance was below expectations, with revenue declining by 17% year-on-year to RMB 2.4 billion, falling short of market expectations by 6% [1] - Gross margin decreased by 4 percentage points year-on-year to 80.4%, aligning with market consensus [1] - Operating profit plummeted by 76% to RMB 277 million, with the operating profit margin declining by 28 percentage points to 11% [1] - Net profit fell by 49% year-on-year to RMB 213 million, with the net profit margin narrowing by 5 percentage points to 8.8% [1]