Analyst Thomas Chong of Jefferies maintained a Buy rating on Kingsoft (KSFTF – Research Report), with a price target of HK$34.00.
Thomas Chong ascribed his Buy rating for Kingsoft’s stock (KSFTF) mainly due to two key reasons. Firstly, Kingsoft’s online games revenue outperformed his expectations. The company has seen consistent revenue growth, particularly from JX Online III, which is set to continue into 2023. Furthermore, the upcoming release of the new mobile game, JX3 Ultimate, in 2024 is expected to boost revenue growth even further.
Secondly, Kingsoft Office, despite softer than expected revenue in the third quarter, is confidently pushing forward with AI strategies in AIGC, Copilot, and Insight. These strategies are supported by their own models with a well-managed cost structure. The company has also seen significant growth in monthly active devices and paying users, indicating a strong business model. Taken together, these factors suggest a positive outlook for Kingsoft, hence the Buy rating from Thomas Chong.
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Kingsoft (KSFTF) Company Description:
Kingsoft Corp Kingsoft is a Chinese software and Internet services company. It is organized into three operating segments: Entertainment software segment engages in the research and development of games, and provision of online games, mobile games and casual game services, the Information Security and Internet Services segment engages in the research, development and operation of information security software, internet browser, mission critical mobile applications, and provision of online marketing services and internet value-added services and the Office Software and others segment involved in the research, development and distribution of office application software, provision of cloud storage, cloud computation and dictionary services.
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