HK Stock Market Move | KINGSOFT (03888) falls by more than 5% again, Credit Suisse expects first-quarter performance to fall below expectations, forecasting a 1% year-on-year decline in second-quarter revenue.

KINGSOFT (03888) dropped more than 5% in trading today, with a cumulative decline of over 10% after the earnings report. As of the time of writing, it has fallen by 3.61% to HK$32.05, with a trading volume of HK$175 million. In terms of news, KINGSOFT recently released its first quarter earnings, reporting a revenue of 2.338 billion RMB, an increase of 9% year-on-year; the net profit attributable to the parent company was 284 million RMB, a decrease of 0.24% year-on-year. In the first quarter, revenue from its office software and services business was 1.302 billion RMB, up 6% year-on-year but down 13% quarter-on-quarter; revenue from its online games and other businesses was 1.037 billion RMB, up 14% year-on-year but down 20% quarter-on-quarter. Furui Research released a report stating that KINGSOFT's first quarter performance was below expectations, and it is expected that total revenue in the second quarter will decrease by approximately 1% year-on-year (previously predicted to increase by 3% year-on-year), mainly due to the weak performance of the online gaming business compared to last year's high base due to the "Avalanche: Lockdown Area" effect; the adjusted operating profit margin is expected to decrease by approximately 7 percentage points to 28.5% year-on-year, considering the sales and marketing expenses for the upcoming new game "Mecha BREAK" to be released in the third quarter. The bank's forecast for full-year 2025 revenue and adjusted operating profit remains basically unchanged, lowering the target price from HK$43.3 to HK$42.8, and maintaining a "buy" rating.