Core 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]

Core 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 Adjustments - The group discount rate has been increased from 40% to 50% due to the widening valuation gap between the office business A/H as market capitalization rises [1] - The price-to-earnings (P/E) ratio for the gaming business has been reduced from 10x to 8x, and the net profit margin for the gaming segment has been adjusted down from 20% to 15%, corresponding to a 44x P/E for 2026 [1] Group 2: Earnings Performance - Kingsoft's Q3 2025 earnings 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%, and operating profit at CNY 277 million, down 75.8% year-on-year [1] - Based on a more cautious outlook for the gaming business, revenue forecasts for 2025 and 2026 have been reduced by 6.9% and 5.6%, respectively, to CNY 9.62 billion and CNY 10.91 billion [1] - Due to one-time gains related to Kingsoft Cloud's placement, the net profit forecast for 2025 has been increased by 27.1% to CNY 1.79 billion; however, the net profit forecast for 2026 has been decreased by 34.7% to CNY 1.12 billion due to revenue adjustments and increased investments related to AI strategy [1]

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]