Bank of America Securities: Reaffirms "buy" rating on KINGSTON (03888), target price raised to HK$38

Bank of America Securities released a research report stating, reiterating a "buy" rating for KINGSOFT (03888), considering the improvement in the gaming business performance and the launch of multiple new games next year. Accordingly, the profit forecast for KINGSOFT for the years 2024 to 2026 has been raised by 2% to 3%, with the target price raised from HK$37 to HK$38. The report stated that benefited from strong growth in the gaming business, KINGSOFT recorded revenue of 2.91 billion yuan in the third quarter, a year-on-year increase of 42%, which was 13% higher than market expectations. Quarterly net profit reached 413 million yuan, a year-on-year increase of 13.5 times, which was 14% higher than market forecasts. The operating profit margin increased by 21 percentage points to 39.3% year-on-year, mainly driven by the increase in gross profit margin due to the shift in revenue to the gaming business.