KINGSOFT(03888) 开源证券·2025-03-23 08:44Investment Rating - The investment rating for Kingsoft Corporation (03888.HK) is "Buy" (maintained) [5] Core Views - The gaming business is returning to stable growth, while AI and the benefits from the new infrastructure are expected to drive the growth of WPS. Kingsoft Cloud is benefiting from AI industry trends and the Xiaomi ecosystem, which is expected to continue improving profitability. However, due to the slowdown in gaming business and the lack of acceleration in WPS C-end revenue, the forecast for net profit attributable to shareholders for 2025-2026 has been revised down from 2.05 billion/2.45 billion to 1.86 billion/2.39 billion. A new forecast for 2027 net profit of 2.71 billion is introduced, with year-on-year growth of 20%/28%/14%. The current stock price corresponds to a PE valuation of 25.8/20.1/17.7 times, maintaining the "Buy" rating [5][6][8]. Financial Summary and Valuation Indicators - For 2024, the expected revenue is 11.547 billion, with a year-on-year growth of 11.9%. The net profit is projected to be 1.864 billion, reflecting a year-on-year growth of 20.1%. The gross margin is expected to be 81.7%, and the net margin is projected at 16.1%. The return on equity (ROE) is expected to be 9.4%, with an EPS of 1.396 and a P/E ratio of 25.8 [9]. Gaming Business Performance - In Q4 2024, the gaming business achieved revenue of 1.29 billion, with a year-on-year growth of 26.0% but a quarter-on-quarter decline of 24%. The high base from Q3's 15th anniversary celebration of "Jian Wang 3" and a decrease in the release of some game monetization content contributed to this decline. The number of new users reached a record high, and the IP remains robust. Upcoming games are expected to stabilize the business [6][8]. WPS Business Performance - In Q4 2024, WPS C-end revenue growth slowed, achieving 1.5 billion with a year-on-year growth of 16.8%. Personal subscription revenue grew by 7.6%, while enterprise subscription revenue increased by 27.9%, benefiting from the cyclical recovery of new infrastructure and the SaaS process in the B-end [7][8]. Kingsoft Cloud Performance - Kingsoft Cloud's revenue in Q4 2024 reached 2.23 billion, with a year-on-year growth of 29.6%. AI-related revenue grew approximately 500%, and the company is expected to continue reducing losses in the future [8].