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Kingsoft Corp Ltd (HK:3888)
:3888

Kingsoft (3888) AI Stock Analysis

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HK:3888

Kingsoft

(3888)

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Neutral 62 (OpenAI - 5.2)
Rating:62Neutral
Price Target:
HK$34.00
▲(7.32% Upside)
Kingsoft's overall stock score reflects a balance of strong financial health and operational efficiency against bearish technical indicators and a mixed earnings outlook. The company's robust office software growth is offset by challenges in the gaming segment and increased expenses, leading to a moderate valuation.
Positive Factors
Balance Sheet Strength
Extremely low leverage provides durable financial flexibility: it lowers bankruptcy risk, reduces interest burden, and allows the company to fund R&D, M&A or price competition from cash reserves. This structural strength supports long-term investment without refinancing stress.
High Margins and Cash Conversion
Sustained gross margins above 80% and improving net margins indicate strong pricing power and a capital-light software business model. Coupled with healthy operating cash flow to net income (0.77) and FCF conversion (0.88), this supports persistent internal funding for growth and resilience through cycles.
WPS Scale, AI and Internationalization
Rapid adoption of WPS 365, rising active devices and AI-enabled features point to a durable, scalable productivity platform. Network effects and localization projects improve monetization and enterprise traction, underpinning long-term subscription and services revenue growth beyond cyclical gaming.
Negative Factors
Declining Total Revenue
A 17% YoY revenue decline reflects weakening top-line momentum that can erode operating leverage and limit reinvestment capacity. If persistent, shrinking revenue undermines scale benefits in software and cloud segments and raises execution risk for expansion and product investment plans.
Gaming Revenue Volatility
A near-halving of games revenue reflects product lifecycle risk and volatile monetization in the gaming portfolio. Reliance on cyclical hits creates earnings variability and forces reallocation of resources to development; absent a steady new-game pipeline, this is a persistent drag on consolidated growth.
Margin Pressure from Rising Expenses
Substantially higher selling and distribution costs alongside rising R&D have compressed operating profit sharply. If structural (international expansion, AI investments) these costs may persist long term and depress near-term profitability and ROIC until investments scale and monetize sufficiently.

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 generates revenue through multiple streams, with significant contributions from its software licensing, cloud services, and online gaming sectors. The company's WPS Office suite earns money through subscription models, software sales, and advertisements. Kingsoft Cloud provides cloud infrastructure and services, generating revenue through usage-based billing and long-term contracts with enterprise clients. Additionally, its online gaming division earns from in-game purchases, subscriptions, and advertising. Partnerships with other tech firms and enterprises further enhance its revenue potential, along with continuous innovation and expansion into new markets.

Kingsoft Earnings Call Summary

Earnings Call Date:Nov 19, 2025
(Q3-2025)
|
% Change Since: |
Next Earnings Date:Mar 25, 2026
Earnings Call Sentiment Neutral
The earnings call presented a mixed outlook for Kingsoft Corporation. While there are significant achievements in the office software and services business, especially in WPS 365 and software localization projects, the overall performance is hindered by declines in total revenue, online games revenue, and operating profit. Increased expenses and a marked decrease in profit also contribute to a challenging financial landscape.
Q3-2025 Updates
Positive Updates
Growth in Office Software and Services Business
Revenue from the office software and services business increased by 26% year-over-year and 12% quarter-over-quarter to RMB 1,521 million. This growth was attributed to the WPS software, WPS 365, and WPS individual business.
WPS 365 Business Expansion
WPS 365 business experienced significant growth, with revenue reaching RMB 201 million, a 72% increase year-on-year due to enhanced collaboration and AI product offerings.
WPS Software Business Localization Projects
WPS software business revenue reached RMB 391 million, up 51% year-on-year, driven by robust localization projects and AI-enabled products for government scenarios.
Increase in WPS Office Active Devices
As of September 13, 2025, WPS Office global monthly active devices reached 669 million, an increase of 9% year-on-year. The PC version grew by 14% to 316 million, and the mobile version increased by 5% to 353 million.
Negative Updates
Decline in Total Revenue
Kingsoft's total revenue reached RMB 2.419 billion, a year-on-year decrease of 17% despite a quarter-on-quarter increase of 5%.
Decrease in Online Games Revenue
Revenue from the online games and other business decreased by 47% year-over-year and 6% quarter-over-quarter to RMB 898 million, primarily due to lower contributions from existing games and new games still in development.
Decline in Operating Profit
Operating profit before share-based compensation costs decreased by 70% year-over-year and 21% quarter-over-quarter to RMB 357 million.
Increased Expenses
Research and development costs increased by 4% year-over-year and 5% quarter-over-quarter, while selling and distribution expenses increased by 55% year-over-year and 33% quarter-over-quarter.
Profit Decline
Profit attributable to owners of the parent was RMB 213 million for this quarter, compared with profit of RMB 413 million and RMB 532 million for the third quarter of 2024 and the second quarter of 2025.
Company Guidance
During Kingsoft Corporation's Third Quarter 2025 Earnings Conference Call, the company provided guidance highlighting several key financial metrics and strategic priorities. Total revenue for the third quarter of 2025 was reported at RMB 2.419 billion, marking a year-on-year decrease of 17% but a quarter-on-quarter increase of 5%. The office software and services segment saw a significant revenue growth of 26% year-over-year to RMB 1,521 million, driven by the robust performance of WPS software, WPS 365, and the WPS individual business. Conversely, the online games segment experienced a 47% year-over-year decline in revenue to RMB 898 million. Key performance indicators for WPS Office included a 9% year-on-year increase in global monthly active devices to 669 million. The company emphasized its focus on AI collaboration and internationalization, with notable progress in AI-powered products and a strong cash position of RMB 26 billion as of September 30, 2025. Operating profit before share-based compensation costs decreased by 70% year-on-year to RMB 357 million, while research and development costs rose by 4% year-over-year to RMB 900 million, reflecting higher investments in AI and collaboration products.

Kingsoft Financial Statement Overview

Summary
Kingsoft demonstrates strong financial health with robust profitability margins and a solid balance sheet. While recent revenue and free cash flow declines pose challenges, the company maintains operational efficiency and low leverage, positioning it well for future growth opportunities.
Income Statement
75
Positive
Kingsoft's income statement shows strong gross profit margins consistently above 80%, indicating effective cost management. However, the recent TTM data reflects a slight revenue decline of 1.58%, contrasting with previous growth trends. Net profit margins have improved to 16.32% in the TTM, showing recovery from past losses. EBIT and EBITDA margins remain robust, suggesting operational efficiency.
Balance Sheet
80
Positive
The balance sheet is solid with a very low debt-to-equity ratio of 0.0013 in the TTM, indicating minimal leverage and financial stability. Return on equity has improved to 7.34%, reflecting better profitability. The equity ratio is strong, showcasing a well-capitalized position with a significant portion of assets funded by equity.
Cash Flow
70
Positive
Cash flow analysis reveals a decline in free cash flow growth by 8.47% in the TTM, which could be a concern. However, the operating cash flow to net income ratio is healthy at 0.77, indicating good cash generation relative to net income. The free cash flow to net income ratio of 0.88 suggests efficient cash conversion.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue10.35B10.32B8.53B7.64B6.37B5.59B
Gross Profit8.57B8.58B7.03B6.18B5.21B4.68B
EBITDA3.84B3.83B1.90B1.65B1.50B2.67B
Net Income1.69B1.55B483.46M-6.05B395.33M10.05B
Balance Sheet
Total Assets37.47B38.28B35.19B31.89B36.54B35.04B
Cash, Cash Equivalents and Short-Term Investments25.15B26.58B23.86B21.33B19.09B17.96B
Total Debt32.53M3.02B2.84B2.80B2.45B2.42B
Total Liabilities6.28B9.87B8.62B7.73B7.74B6.82B
Stockholders Equity25.12B22.46B21.29B19.50B24.78B24.66B
Cash Flow
Free Cash Flow3.41B4.16B3.01B2.06B1.92B2.46B
Operating Cash Flow3.88B4.59B3.49B2.57B2.22B2.99B
Investing Cash Flow181.50M-8.52B-6.48B4.42B-1.61B-7.57B
Financing Cash Flow-1.89B-1.08B655.86M-619.04M-479.61M1.88B

Kingsoft Technical Analysis

Technical Analysis Sentiment
Positive
Last Price31.68
Price Trends
50DMA
29.86
Positive
100DMA
31.86
Negative
200DMA
34.13
Negative
Market Momentum
MACD
0.73
Negative
RSI
61.40
Neutral
STOCH
70.82
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:3888, the sentiment is Positive. The current price of 31.68 is above the 20-day moving average (MA) of 29.72, above the 50-day MA of 29.86, and below the 200-day MA of 34.13, indicating a neutral trend. The MACD of 0.73 indicates Negative momentum. The RSI at 61.40 is Neutral, neither overbought nor oversold. The STOCH value of 70.82 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:3888.

Kingsoft Peers Comparison

Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
72
Outperform
HK$2.69B8.0812.02%13.83%-27.66%-51.96%
70
Outperform
HK$4.39B7.6517.91%3.82%4.02%-23.98%
64
Neutral
HK$108.09B129.755.32%16.59%
62
Neutral
HK$44.23B26.606.19%0.48%-0.11%12.80%
61
Neutral
HK$42.38B28.0257.06%1.18%51.87%4031.49%
60
Neutral
$48.67B4.58-11.27%4.14%2.83%-41.78%
39
Underperform
HK$1.26B-0.44-57.29%-36.80%-666.80%
* Communication Services Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
HK:3888
Kingsoft
31.68
-2.17
-6.40%
HK:0799
IGG
3.83
0.41
12.05%
HK:9626
Bilibili, Inc. Class Z
260.00
122.80
89.50%
HK:2400
XD, Inc.
86.00
61.76
254.79%
HK:2660
Zengame Technology Holding Ltd.
2.60
0.40
18.18%
HK:0302
CMGE Technology Group Limited
0.42
-0.35
-45.45%

Kingsoft Corporate Events

Kingsoft Renews Three-Year Connected Transaction Framework with Xiaomi
Dec 30, 2025

Kingsoft Corporation has renewed and expanded its framework agreement with Xiaomi Group for a further three years to 31 December 2028, formalising a series of continuing connected transactions between the two companies. Under the new agreement, Kingsoft will provide Xiaomi with promotion, mailbox customised development, and licensing and subscription services, and will jointly operate Kingsoft’s games on Xiaomi’s platforms, while Xiaomi will in turn offer promotion, catering and other ancillary services, as well as supply products to Kingsoft. As Xiaomi is an associate of Kingsoft director and substantial shareholder Lei Jun, the deal is treated as a continuing connected transaction under Hong Kong listing rules, triggering reporting, announcement and annual review requirements but exempting it from independent shareholders’ approval; Lei Jun abstained from the board vote, and no other director was considered to have a material interest. The renewal underscores the stable, long-term business relationship between Kingsoft and Xiaomi and provides both sides with an institutional framework for ongoing cooperation in services, products and game operations over the medium term.

The most recent analyst rating on (HK:3888) stock is a Hold with a HK$30.00 price target. To see the full list of analyst forecasts on Kingsoft stock, see the HK:3888 Stock Forecast page.

Kingsoft Signs RMB256 Million Connected Lease with Xiaomi-Affiliated Beijing Duokan
Dec 30, 2025

Kingsoft has entered into a six-year connected lease transaction with Beijing Duokan, an affiliated entity of Xiaomi, under which Beijing Duokan will lease office premises and 184 parking spaces in Xiaomi Science and Technology Park in Beijing to Kingsoft group entities from 1 January 2026 to 31 December 2031. The arrangement, carrying an aggregate consideration of about RMB256.17 million to be recognised as right-of-use assets under IFRS 16, supports Kingsoft’s operational needs while triggering reporting and announcement obligations as a connected transaction under Hong Kong listing rules, although it is exempt from independent shareholders’ approval; director and substantial shareholder Jun Lei abstained from voting due to his interest in Xiaomi, underscoring governance measures around related-party dealings.

The most recent analyst rating on (HK:3888) stock is a Hold with a HK$30.00 price target. To see the full list of analyst forecasts on Kingsoft stock, see the HK:3888 Stock Forecast page.

Kingsoft Unit BKOS Grants 669,000 Restricted Shares to Key Staff Under 2025 Incentive Scheme
Dec 29, 2025

Kingsoft Corporation has announced that its majority-owned subsidiary Beijing Kingsoft Office Software (BKOS) has granted 669,000 restricted shares to 47 core management and technical employees under the BKOS 2025 Share Incentive Scheme. The award, priced at RMB150.56 per share versus a market price of RMB300.08 on the grant date, is intended to recognise contributions and strengthen retention of key talent without triggering any connected transaction thresholds or concentration limits under Hong Kong listing rules. The move underlines Kingsoft’s ongoing use of equity incentives to align BKOS’s leadership and technical staff with long-term performance, potentially supporting the competitiveness and stability of its core office software business in a fast-evolving domestic tech market.

The most recent analyst rating on (HK:3888) stock is a Hold with a HK$30.00 price target. To see the full list of analyst forecasts on Kingsoft stock, see the HK:3888 Stock Forecast page.

Kingsoft Reports Decline in Q3 2025 Financials but Growth in WPS Office Users
Nov 19, 2025

Kingsoft Corporation Limited reported its unaudited financial results for the three months ending September 30, 2025, showing a decline in revenue and profits compared to the previous year. Despite a 17% year-on-year decrease in revenue and a 76% drop in operating profit, the company saw a 9% increase in the monthly active devices of WPS Office globally, indicating growth in its user base.

The most recent analyst rating on (HK:3888) stock is a Buy with a HK$37.00 price target. To see the full list of analyst forecasts on Kingsoft stock, see the HK:3888 Stock Forecast page.

Kingsoft Establishes Nomination Committee to Strengthen Governance
Nov 19, 2025

Kingsoft Corporation Limited has announced the establishment of a Nomination Committee, which will be responsible for overseeing the nomination of board members. The committee is tasked with reviewing the board’s structure, identifying qualified candidates for directorships, assessing the independence of non-executive directors, and making recommendations on appointments and succession planning. This move is expected to enhance the company’s governance and strategic alignment.

The most recent analyst rating on (HK:3888) stock is a Buy with a HK$37.00 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 Quarterly Results
Nov 3, 2025

Kingsoft Corporation Limited has announced a board meeting scheduled for November 19, 2025, to review and approve the unaudited quarterly results for the period ending September 30, 2025. This meeting is crucial for stakeholders as it will provide insights into the company’s financial performance and strategic direction.

The most recent analyst rating on (HK:3888) stock is a Buy with a HK$37.00 price target. To see the full list of analyst forecasts on Kingsoft stock, see the HK:3888 Stock Forecast page.

Kingsoft Office Reports Strong Financial Growth in 2025
Oct 27, 2025

Kingsoft Corporation Limited announced key financial results for its subsidiary, Beijing Kingsoft Office Software, Inc., for the nine months ending September 30, 2025. The report highlights a significant increase in revenue and profits, with revenue rising by 15.21% to RMB 4,178,385 thousand and net profit attributable to shareholders increasing by 13.32% to RMB 1,178,438 thousand. The company’s total assets grew by 4.53% compared to the end of last year, indicating a strong financial performance and positive cash flow from operations. These results suggest a robust market position and potential positive implications for stakeholders.

The most recent analyst rating on (HK:3888) stock is a Hold with a HK$36.00 price target. To see the full list of analyst forecasts on Kingsoft stock, see the HK:3888 Stock Forecast page.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Nov 21, 2025