Bocom Intl released a research report stating that based on Kingsoft's gaming business profit expansion and Kingsoft Cloud's valuation improvement, the target price of Kingsoft was raised by 10% from 30 Hong Kong dollars to 33 Hong Kong dollars, maintaining a "buy" rating.
The bank expects that Kingsoft's gaming revenue will increase by 30% year-on-year in 2024, with fourth-quarter operations potentially weakening by the season. By 2025, there will be 5 new games in reserve, with 3 already licensed, offsetting the impact of high base numbers of old games. WPS may expand overseas promotion layout by 2025.
The report indicates that Kingsoft's performance in the third quarter exceeded expectations, with total revenue increasing by 42% year-on-year to 2.92 billion yuan, mainly due to the better-than-expected growth in gaming revenue. Adjusted operating profit increased by 168% year-on-year to 1.2 billion yuan. Gaming and other business revenue increased by 78% year-on-year, WPS by 10% year-on-year, accelerating from the second quarter, with individual subscriptions maintaining robust growth. The impact of the B-end SaaS transformation is gradually weakening.
