[ET Net News Agency, 21 August 2020] Credit Suisse lifted its target price for Kingsoft
Corporation (03888) to HK$52 from HK$14.33 and upgraded its rating to "outperform" from
"neutral".
The research house said Kingsoft's revenue surged 49% to Rmb1.42bn, beating consensus on
strong online game performance. Operating profit of HK$549mn also beat on cost-saving and
revenue-mix shift towards high-margin business (game and PC game).
Management lifted the full-year guidance on online game revenue growth from low teens to
over 30% and expects WPS Office momentum to continue in 2H.
Credit Suisse remains confident of Kingsoft on (1) its strong game pipeline; (2)
growing WPS subscription services and more monetisation potential; and (3) improving
margins on operating leverage and efficiencies.
Credit Suisse revised up its FY2020-21 earnings forecasts to reflect the positive 2H
outlook across the online game, WPS, and Cloud. (KL)