Morgan Stanley lowered its target price for Kingsoft Corporation (03888) to HK$15 from HK$23 and maintained its "equal-weight" rating.
The research house said Kingsoft's revenue of Rmb1.87bn was in line with its estimate - but game revenue missed by 14% despite the launch of JX III mobile on 12 June.
JX III mobile grossing in the first month was Rmb150mn, and Morgan estimated the monthly run rate has dropped to Rmb30-50mn in the last two weeks. Thus, it does not expect sequential growth to resume until 4Q - the company plans to launch a new version of JX III
mobile in late October/November.
Morgan cut its 2019-21 revenue estimates 4-11%. It expects a non-GAAP net loss of Rmb319mn in 2019 and cut net profit estimates for 2020 and 2021 47% and 33%.
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