KINGSOFT(03888) 智通财经网·2025-05-30 01:50Core Viewpoint - CICC maintains its revenue and net profit forecasts for Kingsoft (03888) for 2025 and 2026, with a target price of HKD 50, indicating a 39% upside potential based on a 2025 P/E ratio of 24.9x [1] Group 1: Office Business - The office business experienced a year-on-year revenue growth of 6%, driven by WPS personal and WPS 365 services, but saw a quarter-on-quarter decline of 13% due to disruptions from new procurement processes for domestic software [2] - As of March 2025, WPS Office's global monthly active devices reached 647 million, with a year-on-year increase of 8%, and the PC version had 301 million monthly active devices, up 11% year-on-year [2] - The management emphasized a core strategy of "AI + collaboration + overseas" for the office business, with a focus on leveraging the user base accumulated in overseas markets since 2018 [2] Group 2: Gaming Business - The gaming business reported a year-on-year revenue increase of 14%, mainly due to contributions from "Jian Wang 3" and the anime game "Chen Bai Jin Qu," but experienced a quarter-on-quarter decline of 20% due to seasonal factors [3] - Upcoming new games include the sci-fi mech game "Jie Xian Ji," expected to launch in summer 2025, and the sequel to the "Jian Xia Qing Yuan" series, which will have a full platform public test on May 29 [3] - Future strategies for the gaming business include adhering to a principle of quality, diversifying game genres beyond martial arts, and exploring international markets [3] Group 3: Financial Performance - In Q1, the operating profit margin was 25.7%, down 2.4 percentage points year-on-year and 13.9 percentage points quarter-on-quarter, primarily due to increased R&D investments in AI and new games [4] - The net profit margin was 12.1%, reflecting a year-on-year decline of 1.2 percentage points and a quarter-on-quarter decline of 4.3 percentage points, mainly due to the drop in operating profit margin [4]