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In a recent research report, UOB Kay Hian highlighted that Kingsoft's first-quarter performance fell short of market projections. Revenue grew by 9.4%, undershooting the anticipated 16%, while net profit remained stagnant year-on-year. Despite the robust progress in AI development, which has the potential to mitigate the impact of decelerating cloud revenue growth, UOB Kay Hian remains cautiously optimistic. Consequently, the bank has revised the target price down to HK$47, while maintaining its 'Buy' rating for the company.
Additionally, due to the slowdown in online game revenue growth and intensifying market competition, UOB Kay Hian has reduced its revenue forecast for Kingsoft's second quarter by 1% and its full-year forecast by 2%. Reflecting increased investments in AI, the bank has also trimmed its second-quarter adjusted net profit forecast by 9%.
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