Morgan Stanley: Maintains "in line with market" rating on KINGOSOFT (03888), lowers target price to HK$33. Game business performs below expectations.

Morgan Stanley released a research report stating that it has lowered the target price of KINGSoft (03888) from HK$38 to HK$33, while maintaining a "market-perform" rating. After obtaining KINGSOFT's third-quarter performance data, its revenue forecasts for 2025 to 2027 were lowered by 3.6%, 3.7%, and 3.5% respectively, to reflect weaker-than-expected performance in the gaming business. Due to the downward revision of revenue and gross margin forecasts, coupled with an expected increase in capital expenditure, the company's earnings per share estimates have been reduced by 12.4%, 5.8%, and 9.6%.