KINGSOFT (03888) dropped over 4%, falling 4.06% to HK$34.3 as of press time, with trading volume reaching HK$403 million.
On the news front, Morgan Stanley recently published a research report downgrading KINGSOFT's rating from "overweight" to "equal weight," citing the underperformance of its major new game "Unlimit" in initial downloads. AI monetization in office software continues to face challenges. Morgan Stanley also cut KINGSOFT's gaming revenue forecasts for 2025-2027 by 11% to 13%, and reduced earnings per share projections by 25% to 30%. The target price was lowered from HK$45 to HK$41.
CICC also indicated that it expects KINGSOFT's second-quarter revenue to reach 2.29 billion yuan, down 7.5% year-over-year. The firm anticipates recovery growth in the office business while the gaming segment faces pressure due to a high comparison base. The firm noted that the sequel "Swordsman Love Zero" from the Swordsman Love series launched its full-platform open beta on May 29, showing relatively modest performance after launch. The new sci-fi mech game "Unlimit" also entered global open beta on July 2, with Steam peak concurrent users breaking through 130,000 on the first day of open beta.
Based on cautious assumptions regarding new game performance and the sustainability of existing games, the firm revised its full-year gaming revenue growth forecast from 5% down to flat growth.
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