Daiwa released a report stating that kingsoft (03888.HK) had a strong performance in the third quarter, exceeding expectations. Revenue increased by 17.8% year-on-year to 2.9 billion yuan, surpassing market expectations. The gross margin rose by 3 percentage points year-on-year to 84.2%, meeting market expectations. The non-International Financial Reporting Standards operating profit was 1.2 billion yuan, with the operating profit margin increasing by 20 percentage points year-on-year to 41%, benefiting from strong revenue growth. Net profit was 0.413 billion yuan, with the net profit margin expanding by 14 percentage points year-on-year to 18.4%.

The firm raised its revenue forecasts for kingsoft for the fourth quarter and the whole year by 9% and 6%, reflecting the significant contributions from the online game "Jian Wang 3" and the successful launch of "Jian Wang 3 Wu Jie." The firm also adjusted its forecasts for the company's adjusted net profit for the fourth quarter and the whole year by 1% and 10%, reflecting improved visibility in monetization of ai and prudent cost control.

The firm maintained a "buy" rating on kingsoft, raising the target price from 38 yuan to 40 yuan.