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Kingsoft Corp (HK:3888)
:3888

Kingsoft (3888) AI Stock Analysis

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HK

Kingsoft

(OTC:3888)

Rating:67Neutral
Price Target:
HK$38.00
▲(13.43%Upside)
Kingsoft's strong financial performance with robust revenue growth and cash flow generation is a key positive factor. However, technical indicators show bearish momentum, and valuation metrics suggest the stock may be overvalued. The earnings call provided mixed insights with notable growth but also highlighted some financial challenges.

Kingsoft (3888) vs. iShares MSCI Hong Kong ETF (EWH)

Kingsoft Business Overview & Revenue Model

Company DescriptionKingsoft Corporation Limited, an investment holding company, engages in the design, research and development, sale, and marketing of the office software products and services of WPS Office in Mainland China, Hong Kong, and internationally. It operates in two segments, Office Software and Services, and Entertainment Software and Others. The company is also involved in the research and development of games, and the provision of PC games and mobile games services. In addition, it engages in the research, development, operation, and distribution of games; marketing and operation of SMS, and wireless service of online games and application software; sale and operation of office application software; marketing and operation of entertainment software products; and research, development, and distribution of consumer application software. The company was founded in 1988 and is headquartered in Tsim Sha Tsui, Hong Kong.
How the Company Makes MoneyKingsoft Corporation Limited generates revenue through multiple streams. A significant portion comes from its office software segment, particularly through licensing and subscription fees for WPS Office, which is used by both individual consumers and enterprises. The company also earns revenue from its cloud computing services, which offer IT infrastructure and solutions to businesses across various industries, enhancing their digital transformation efforts. Additionally, Kingsoft derives income from its online games division, where it develops and publishes a range of popular games, generating revenue from in-game purchases and advertising. Strategic partnerships and collaborations with other tech companies further bolster Kingsoft's revenue, enhancing its market presence and expanding its customer base.

Kingsoft Earnings Call Summary

Earnings Call Date:May 28, 2025
(Q1-2025)
|
% Change Since: -12.71%|
Next Earnings Date:Aug 26, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed overview with strong year-on-year growth in revenue, particularly in the WPS 365 business and gaming segment. However, there were notable quarter-on-quarter declines in revenue and profit margins, coupled with increased expenses and net losses. The company's strong cash position and strategic focus on AI and global expansion are positive factors.
Q1-2025 Updates
Positive Updates
Solid Start to 2025 with Revenue Growth
Group revenue reached RMB 2.34 billion, up 9% year-over-year. Kingsoft Office Group achieved a 6% year-on-year increase in total revenue, and the WPS individual business generated revenue of RMB 857 million, up 11% year-on-year.
WPS 365 Business Growth
WPS 365 generated revenue of RMB 151 million in the first quarter, a 63% year-on-year increase, driven by the platform's adoption among private and local state-owned enterprises.
Gaming Segment Performance
The gaming segment's total revenue reached RMB 1.037 billion, a 14% year-on-year increase, with successful titles such as JX3 Online and the anticipated release of Mecha BREAK.
Strong Cash Position
The group had cash resources of RMB 26 billion as of March 31, 2025.
Negative Updates
Quarter-on-Quarter Revenue Decline
Revenue decreased 16% quarter-on-quarter to RMB 2,338 million, driven by a 13% decrease in office software and services and a 20% decrease in online games revenue.
Decreased Profit Margins
Gross profit decreased 18% quarter-on-quarter to RMB 1,919 million, with gross profit margin dropping by 2 percentage points quarter-on-quarter to 82%.
Increased R&D and Selling Expenses
Research and development costs increased 16% year-on-year and 13% quarter-on-quarter to RMB 828 million, and selling and distribution expenses increased 30% year-on-year.
Net Other Losses
Net other losses were RMB 22 million for this quarter compared with losses of RMB 4 million and RMB 74 million for the first and the fourth quarter of 2024, respectively.
Company Guidance
During Kingsoft Corporation's Q1 2025 earnings call, the company reported a revenue of RMB 2.34 billion, reflecting a 9% year-over-year increase. The Kingsoft Office Group achieved a revenue of RMB 1.301 billion, marking a 6% rise from the previous year, with global monthly active devices for WPS Office reaching 647 million, an 8% increase year-on-year. The WPS individual business contributed RMB 857 million, up 11% year-on-year. The WPS 365 business saw a remarkable 63% year-on-year revenue growth to RMB 151 million. For the gaming segment, revenue grew by 14% year-on-year to RMB 1.037 billion, driven by the success of titles like JX3 Online. The company maintained a robust cash position with RMB 26 billion and highlighted its strategic focus on AI integration and global expansion, especially in office productivity and gaming.

Kingsoft Financial Statement Overview

Summary
Kingsoft's financial performance is robust, demonstrated by strong revenue growth, high profit margins, and solid cash flow generation. The balance sheet reflects financial stability with a strong equity ratio and low leverage. However, a slight uptick in debt requires monitoring.
Income Statement
85
Very Positive
Kingsoft has demonstrated strong revenue growth with a remarkable increase from 2023 to 2024. The gross profit margin is high at approximately 83%, indicating efficient cost management. The net profit margin improved significantly due to a substantial rise in net income. EBIT and EBITDA margins are also robust, reflecting good operational efficiency.
Balance Sheet
78
Positive
The balance sheet shows a healthy equity ratio at around 59%, suggesting solid financial stability. The company maintains a low debt-to-equity ratio, indicating conservative leverage use. Return on Equity (ROE) is strong, showcasing effective use of shareholders' capital. However, monitoring the slight increase in total debt is advisable.
Cash Flow
82
Very Positive
Kingsoft has shown impressive free cash flow growth, indicating strong cash generation capabilities. The operating cash flow to net income ratio is healthy, supporting the sustainability of earnings. The free cash flow to net income ratio reflects efficient cash utilization.
Breakdown
Dec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
10.32B8.53B7.64B6.37B5.59B
Gross Profit
8.58B7.03B6.18B5.21B4.68B
EBIT
3.65B1.90B873.55M472.00M1.86B
EBITDA
3.83B1.90B1.15B1.50B2.67B
Net Income Common Stockholders
1.55B483.46M-5.34B952.84M1.80B
Balance SheetCash, Cash Equivalents and Short-Term Investments
26.58B23.86B21.33B19.09B17.96B
Total Assets
38.28B35.19B31.89B36.54B35.04B
Total Debt
3.02B2.84B2.80B2.45B2.42B
Net Debt
-20.79B-17.43B-15.41B-13.74B-11.63B
Total Liabilities
9.87B8.62B7.73B7.74B6.82B
Stockholders Equity
22.46B21.29B19.50B24.78B24.66B
Cash FlowFree Cash Flow
4.16B3.01B2.06B1.92B2.46B
Operating Cash Flow
4.59B3.49B2.57B2.22B2.99B
Investing Cash Flow
-8.52B-6.48B4.42B-1.61B-7.57B
Financing Cash Flow
-1.08B655.86M-619.04M-479.61M1.88B

Kingsoft Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price33.50
Price Trends
50DMA
37.36
Negative
100DMA
38.73
Negative
200DMA
33.10
Positive
Market Momentum
MACD
-1.58
Positive
RSI
35.18
Neutral
STOCH
18.64
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:3888, the sentiment is Neutral. The current price of 33.5 is below the 20-day moving average (MA) of 36.77, below the 50-day MA of 37.36, and above the 200-day MA of 33.10, indicating a neutral trend. The MACD of -1.58 indicates Positive momentum. The RSI at 35.18 is Neutral, neither overbought nor oversold. The STOCH value of 18.64 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for HK:3888.

Kingsoft Peers Comparison

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
67
Neutral
HK$46.77B26.577.07%0.42%19.66%169.54%
61
Neutral
$14.59B5.85-4.31%3.69%2.76%-30.36%
$523.24M7.0019.85%4.20%
67
Neutral
HK$60.24B-4.30%20.62%87.94%
67
Neutral
HK$2.35B4.9317.68%10.09%-21.05%-41.78%
63
Neutral
HK$19.50B21.7438.63%44.92%
41
Neutral
HK$1.44B-43.81%-27.68%-11792.65%
* Communication Services Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
HK:3888
Kingsoft
33.50
7.77
30.18%
IGGGF
IGG
0.45
0.08
21.62%
HK:9626
Bilibili, Inc. Class Z
146.60
35.30
31.72%
HK:2400
XD, Inc.
40.35
22.17
121.95%
HK:2660
Zengame Technology Holding Ltd.
2.28
-0.70
-23.49%
HK:0302
CMGE Technology Group Limited
0.46
-0.67
-59.29%

Kingsoft Corporate Events

Kingsoft Grants Restricted Shares to Key Employees Under Incentive Scheme
Jun 4, 2025

Kingsoft Corporation Limited announced the grant of 2,791,000 restricted shares to 198 employees under the BKOS 2025 Share Incentive Scheme. This move aims to recognize the contributions of key personnel and retain talent within the BKOS Group, enhancing the company’s operational stability and competitive positioning in the market.

The most recent analyst rating on (HK:3888) stock is a Buy with a HK$43.30 price target. To see the full list of analyst forecasts on Kingsoft stock, see the HK:3888 Stock Forecast page.

Kingsoft Corporation Successfully Passes All Resolutions at 2025 AGM
May 29, 2025

Kingsoft Corporation Limited held its Annual General Meeting on May 29, 2025, where all proposed resolutions were successfully passed by shareholder vote. Key decisions included the approval of the 2024 financial statements, the declaration of a final dividend, the re-election of directors, and the reappointment of Ernst & Young as auditors. These outcomes reflect strong shareholder support and are expected to positively impact the company’s governance and financial strategies moving forward.

The most recent analyst rating on (HK:3888) stock is a Buy with a HK$43.30 price target. To see the full list of analyst forecasts on Kingsoft stock, see the HK:3888 Stock Forecast page.

Kingsoft Reports Q1 2025 Financial Results with Revenue Growth Amid Profit Decline
May 28, 2025

Kingsoft Corporation Limited announced its unaudited financial results for the first quarter of 2025, showing a 9% year-on-year increase in revenue to RMB 2,337,995,000. Despite this revenue growth, the company experienced a decline in operating profit and profit attributable to owners, with a notable decrease in basic and diluted earnings per share. The operational highlights reveal an 8% increase in the monthly active devices of WPS Office globally, reaching 647 million, and a 17% year-on-year growth in accumulated paying subscribers in Mainland China, totaling 41.7 million.

The most recent analyst rating on (HK:3888) stock is a Buy with a HK$43.30 price target. To see the full list of analyst forecasts on Kingsoft stock, see the HK:3888 Stock Forecast page.

Kingsoft Schedules Board Meeting to Review Q1 2025 Results
May 12, 2025

Kingsoft Corporation Limited has announced a board meeting scheduled for May 28, 2025, to review and approve the unaudited quarterly results for the first quarter ending March 31, 2025. This meeting is significant as it will provide insights into the company’s financial performance, potentially impacting its market positioning and stakeholder confidence.

Kingsoft Announces Change in AGM Schedule and Book Closure Period
Apr 30, 2025

Kingsoft Corporation Limited has announced a change in the schedule for its Annual General Meeting (AGM) and the corresponding book closure period for determining shareholder eligibility. The AGM, initially set for May 22, 2025, will now be held on May 29, 2025, with the book closure period adjusted accordingly. This change impacts shareholders’ ability to attend the AGM and qualify for the proposed final dividend, requiring them to lodge share transfers by specific dates to maintain eligibility.

Kingsoft Announces Final Dividend for 2024 with Updated Dates
Apr 30, 2025

Kingsoft Corporation Limited has announced a final cash dividend of HKD 0.15 per share for the financial year ending December 31, 2024. The announcement includes updated dates for shareholders’ approval, the ex-dividend date, and the book closure period, with the payment date set for June 18, 2025. This update reflects Kingsoft’s commitment to returning value to its shareholders and may positively impact investor sentiment.

Kingsoft Announces 2025 Annual General Meeting Agenda
Apr 30, 2025

Kingsoft Corporation Limited has announced its Annual General Meeting to be held on May 29, 2025, in Zhuhai, Guangdong, PRC. Key agenda items include the consideration of audited financial statements for 2024, declaration of a final dividend, re-election of directors, and re-appointment of auditors. The meeting will also address resolutions enabling the directors to allot and issue additional shares, which could impact the company’s capital structure and shareholder value.

Kingsoft Completes Full Redemption of Convertible Bonds
Apr 29, 2025

Kingsoft Corporation Limited announced the full redemption of its outstanding convertible bonds upon maturity. The company had previously issued HK$3.1 billion in convertible bonds, of which approximately 73.35% were converted into shares. The remaining bonds, amounting to approximately HK$826 million, were fully redeemed along with accrued interests, leading to their cancellation and delisting from the Hong Kong Stock Exchange. This move marks a significant financial maneuver for Kingsoft, potentially impacting its financial structure and signaling a strategic shift in its capital management.

Kingsoft Office Reports Strong Q1 2025 Revenue and Profit Growth
Apr 23, 2025

Kingsoft Corporation Limited announced the financial results of its subsidiary, Beijing Kingsoft Office Software, Inc., for the first quarter of 2025. The company reported a 6.22% increase in revenue and a 9.75% rise in net profit attributable to shareholders compared to the same period last year. Despite these positive results, the net cash flow from operating activities saw a significant decline of 77.05%. The company also increased its research and development expenses by 16.17%, reflecting its commitment to innovation. These financial indicators suggest a strong performance in revenue and profit, but the decrease in cash flow may raise concerns among stakeholders.

Kingsoft Announces Partial Conversion of Convertible Bonds
Apr 17, 2025

Kingsoft Corporation Limited announced the partial conversion of its HK$3,100,000,000 0.625% Convertible Bonds due 2025. On April 17, 2025, the company issued 12,366,980 shares to bondholders who exercised their conversion rights, representing approximately 13.87% of the initial principal amount of the bonds. This conversion results in the cancellation of the converted bonds, reducing the outstanding principal amount to approximately HK$826 million. The conversion impacts the company’s share structure, increasing the total shares in issue by approximately 0.88%. Kingsoft will continue to announce further redemptions or cancellations of the bonds as necessary.

Kingsoft Corporation to Increase Stake in Kingsoft Cloud Through New Share Subscription
Apr 17, 2025

Kingsoft Corporation Limited announced a Subscription Agreement with Kingsoft Cloud, wherein Kingsoft has agreed to subscribe to new shares at HK$5.83 each. This transaction is classified as a connected transaction due to the involvement of Mr. Jun LEI, a director with significant voting power in Xiaomi, which holds a stake in Kingsoft Cloud. The Subscription will result in Kingsoft acquiring approximately 1.65% of Kingsoft Cloud’s enlarged share capital, subject to certain conditions. This move could strengthen Kingsoft’s position in the cloud services market, potentially impacting its market strategy and stakeholder interests.

Kingsoft Announces Partial Conversion of Convertible Bonds
Apr 16, 2025

Kingsoft Corporation Limited announced the partial conversion of its 0.625% Convertible Bonds due 2025, resulting in the issuance of 31,924,065 new shares. This conversion represents approximately 35.81% of the initial principal amount of the bonds and reduces the outstanding principal to approximately HK$1,256 million. The conversion and subsequent share issuance slightly increase the company’s total shares in issue, impacting its capital structure and potentially affecting shareholder value.

Kingsoft Announces Partial Conversion of Convertible Bonds
Apr 15, 2025

Kingsoft Corporation Limited announced the partial conversion of its convertible bonds, resulting in the issuance of 10,123,667 new shares to bondholders. This conversion represents approximately 11.35% of the initial principal amount of the bonds and 0.75% of the company’s total shares. The outstanding principal amount of the convertible bonds is now approximately HK$2,366 million, indicating a significant reduction in debt and potential positive impact on the company’s financial structure.

Kingsoft Announces Partial Conversion of Convertible Bonds
Apr 14, 2025

Kingsoft Corporation Limited announced the partial conversion of its convertible bonds, originally issued in 2020, with bondholders exercising conversion rights resulting in the issuance of over 10 million new shares. This conversion represents approximately 12.32% of the initial principal amount of the bonds, reducing the outstanding principal to approximately HK$2,718 million. The conversion impacts the company’s share structure, increasing the total shares in issue by approximately 0.82%. Kingsoft plans to make further announcements regarding future redemptions or cancellations of the bonds.

Kingsoft Office Reports Strong 2024 Financial Performance
Mar 19, 2025

Kingsoft Corporation Limited announced the 2024 financial results of its subsidiary, Beijing Kingsoft Office Software, Inc. The subsidiary reported a significant increase in revenue and net profit, with revenue rising by 12.40% and net profit attributable to shareholders increasing by 24.84% compared to the previous year. The company’s strong financial performance highlights its robust market positioning and potential for continued growth, benefiting its shareholders and investors.

Kingsoft Reports Strong Financial Growth in 2024
Mar 19, 2025

Kingsoft Corporation Limited has announced its audited financial results for the year ending December 31, 2024, showing a significant increase in revenue and profitability. The company reported a 21% increase in revenue to RMB 10.3 billion and a 64% rise in operating profit to RMB 3.6 billion compared to the previous year. Profit attributable to owners of the parent surged by 221%, reflecting strong operational performance. The Board has recommended a final dividend of HK$0.15 per share, pending shareholder approval. These results indicate a robust financial position and positive growth trajectory for Kingsoft, potentially enhancing its market position and shareholder value.

Kingsoft Announces Final Dividend for 2024
Mar 19, 2025

Kingsoft Corporation Limited announced a final cash dividend of HKD 0.15 per share for the financial year ending December 31, 2024. This decision reflects the company’s commitment to returning value to its shareholders. The dividend will be paid on June 18, 2025, following the approval of shareholders on May 22, 2025. The announcement may impact the company’s financial standing and investor relations positively, as it demonstrates financial stability and profitability.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.