KINGSOFT(03888) 光大证券·2025-01-22 11:36Investment Rating - The report maintains a "Buy" rating for Kingsoft Software (3888.HK) [4] Core Views - Kingsoft Software is experiencing positive momentum across its gaming and office software businesses, with significant growth expected in the coming years [3][4] - The gaming segment, particularly the "Jian Wang 3" series, continues to show resilience and profitability, with multiple new games set to launch in 2025 [3][4] - The office software segment is transitioning to a dual subscription model, with the recent launch of WPS AI 2.0 expected to enhance user engagement and revenue [2][3] Summary by Sections 1. Company Overview - Kingsoft Software is one of the earliest software internet companies in China, focusing on gaming and office software, with a balanced revenue contribution from both segments [16][19] 2. Gaming Business - The gaming business is primarily driven by the "Jian Wang" series, which has maintained its appeal over 15 years, with new titles expected to launch in 2025 [3][36] - "Jian Wang 3" has successfully integrated cross-platform data, leading to a significant increase in active users, with 11.46 million monthly active users reported in its first month of open beta for "Jian Wang 3 Wu Jie" [3][49] - The company has five games in its pipeline for 2025, including self-developed and licensed titles, indicating a robust future gaming portfolio [3][68] 3. Office Business - Kingsoft Office is a leading provider of office software in China, with a successful transition to a dual subscription model that has shown positive results [2][74] - The launch of WPS AI 2.0 has introduced new AI tools that enhance user experience and are expected to drive revenue growth in both B2B and B2C segments [2][80] - The company is also expanding its overseas presence, with significant potential for growth in international markets [2][98] 4. Joint Ventures - Kingsoft Cloud is expected to improve its profitability, benefiting from strategic partnerships with Xiaomi and Kingsoft Software, with projected revenue caps for 2025-2027 reaching 113 billion RMB [2][126] - Cheetah Mobile is undergoing a transformation towards AI-driven services, although it remains in a loss-making state in the short term [3][4] 5. Financial Forecast - The report has revised its net profit forecasts for Kingsoft Software for 2024-2026 to 1.52 billion, 2.07 billion, and 2.48 billion RMB, respectively, reflecting a strong growth trajectory [3][135] - Revenue is projected to grow significantly, with a compound annual growth rate (CAGR) of 19.9% expected for 2024 [3][135]