Industrial and Commercial Bank International has raised its profit forecast for Kingsoft Corporation (03888) for 2024 by 12%.
The intelligence and finance APP has learned that Industrial and Commercial Bank International released a research report stating that it maintains its "outperform" rating for Kingsoft Corporation (03888). After the improvement in profits and reduced taxes and fees in the second quarter of 2024, the profit forecast for 2024 is raised by 12%. However, due to lower revenue forecast, the profit forecast for 2025 and 2026 is lowered by 2% and 3% respectively. The target price is lowered by 8% from HK$32.5 to HK$29.8.
The bank stated that considering the changes in revenue when Kingsoft Corporation shifted to enterprise SaaS subscriptions, the revenue forecast for 2024 is lowered by 1%-4%. However, based on the strong performance of the "Swordsman" series, the bank has a positive outlook on its gaming business and expects it to offset some of the impact. Industrial and Commercial Bank International predicts that in the second half of this year, the strong user and revenue momentum of "Swordsman 3" will enhance the growth visibility of the gaming business. As for the office business, the bank expects personal subscriptions to continue to perform well due to product enhancements, especially in cloud services and AI functions, while institutional subscriptions will gradually improve due to the recognition of income from contract liabilities, mitigating the negative factors of institutional authorization.