智通财经网·2025-11-24 03:12Core Viewpoint - CICC maintains an "outperform" rating for Kingsoft Corporation (03888) but lowers the target price by 13% to HKD 39 due to uncertainties in the short-term growth of the gaming business [1] Group 1: Financial Performance - Kingsoft's Q3 2025 performance fell short of market expectations, primarily due to underperformance in the gaming sector, with revenue at CNY 2.419 billion, a year-on-year decline of 17% [1] - Operating profit decreased significantly by 75.8% to CNY 277 million [1] Group 2: Revenue and Profit Forecasts - CICC has revised down the revenue forecasts for 2025 and 2026 by 6.9% and 5.6%, respectively, to CNY 9.62 billion and CNY 10.91 billion, reflecting a more cautious outlook on the gaming business [1] - The net profit forecast for 2025 has been increased by 27.1% to CNY 1.79 billion due to one-time gains related to Kingsoft Cloud's placement [1] - Conversely, the net profit forecast for 2026 has been reduced by 34.7% to CNY 1.12 billion due to revenue adjustments and increased investments related to AI strategy [1] Group 3: Valuation Adjustments - The group discount rate has been adjusted from 40% to 50% due to the widening valuation gap between the A/H shares [1] - The price-to-earnings (P/E) ratio for the gaming business has been lowered from 10x to 8x, with the net profit margin revised down from 20% to 15%, corresponding to a P/E ratio of 44x for 2026 [1]