Bank of America Securities has issued a research report on Kingsoft Corporation Limited (HKG: 03888).

The firm noted the company's first-quarter revenue growth of 3% year-over-year was in line with its expectations.

However, it pointed out that narrowing margins in the gaming segment dragged down the operating profit margin by 9.4 percentage points to 16.4%.

Consequently, the analyst has lowered the price target for Kingsoft from HK$27 to HK$24, while reiterating a "Neutral" rating on the stock.

The bank also revised its earnings forecasts for the company.

It raised its adjusted net profit estimate for 2026 by 55.2% to RMB 2.275 billion, reflecting higher anticipated investment income.

In contrast, it lowered its forecasts for 2027 and 2028 by 7.2% and 6% to RMB 1.774 billion and RMB 2.157 billion, respectively.

These downward revisions are attributed to an expectation of slower growth in the gaming business.