[ET Net News Agency, 29 March 2018] Nomura lowered its target price for Kingsoft
Corporation (03888) to HK$26 from HK$27, and reiterated its "neutral" rating.
The research house trimmed its revenue/EPS forecasts for FY2018 and FY2019 by 2%/8% and
3%/9%, respectively, to factor in lower mobile gaming assumptions. Nomura modelled 23%
growth in FY2018 online gaming revenue versus market-anticipated growth of 25-30%.
Nomura has largely modelled for an improving operating margin in FY2018 following
management's guidance based on the assumptions that there will be decent acceleration in
online gaming revenue, and the operating loss margin for its cloud business (26% of total
FY2017 revenue) will likely improve significantly.
Nomura said it is not as convinced that the desired margin improvement for its cloud
will eventually materialise given intense competition. (KL)