According to the research report released by JCCB International, it maintains a "outperform" rating on Kingsoft (03888). Following the improvement in profitability and tax reduction in the second quarter of 2024, the profit forecast for 2024 has been increased by 12%. However, due to the lower revenue forecast, the profit forecast for 2025-2026 has been lowered by 2% and 3% respectively. The target price has been lowered by 8% to HK$29.8.

The bank stated that considering the change in revenue due to Kingsoft's transformation into enterprise SaaS subscriptions, the revenue forecast for 2024 has been lowered by 1%-4%. However, based on the steady performance of the "Swordman Online" series, the bank has a positive outlook on its gaming business, offsetting some of the impact. JCCB International expects strong user and revenue growth for "Swordman Online 3" in the second half of this year, which will enhance the visibility of the game business. As for the office business, the bank expects personal subscriptions to continue to perform well due to product enhancements, especially in cloud services and AI functions, and institutional subscriptions to gradually improve due to the recognition of contract liabilities, alleviating the negative factors of institutional authorization.