$KINGSOFT (03888.HK)$ KGI has a TA target of 36. Kingsoft Co...

KGI has a TA target of 36.

Kingsoft Corporation is an investment holding company. The Company operates its business through two segments. The Online Game segment mainly engages in the research, development and operation of online games and mobile games, as well as the provision of game licensing services. The Office Software and Services segment mainly engages in the design, research and development, and sales and marketing of the office software products and services. The Company also provides cloud services such as cloud computing, storage, delivery and comprehensive cloud-based solutions.

The company has recently revealed its upcoming launch of a generative AI tool called WPS AI. This innovative tool will be initially integrated into a new generation of online content collaborative editing tools known as "light document" and will eventually be incorporated into the entire range of Kingsoft Office products. With capabilities such as generating emails and articles based on prompts, performing multilingual translations, and crafting advertising slogans, this AI tool enables the company to capitalize on the growing demand for AI tools in the industry.

Starting from 2022, the Chinese central government authorities issued a directive instructing government agencies, state-owned, and state-backed enterprises to discontinue the use of foreign-branded computers and software within a 2-year timeframe. They are to be replaced with domestically developed hardware and software. This ambitious initiative aims to replace a minimum of 50 m PCs used solely by central government agencies. The objective behind this directive is to retain Chinese capital within the country and minimize its outflow to foreign companies. Additionally, it seeks to establish China's self-reliance in technology development and manufacturing. As a result of this plan, the demand for domestically developed software in China is expected to surge, thereby driving revenue growth for Kingsoft in the software sector.

The company saw a rise in 1Q23 revenue to RMB1.970b (+6.0% YoY), compared to RMB1.853b in 1Q21. Net Income rose to RMB192.3m (+96.0% YoY), compared to RMB98.1m in 1Q21. Basic EPS rose to RMB0.14, (+100.0% YoY) compared to RMB0.07 in 1Q21.

According to Bloomberg, 12-month tp is HK37.70.