Lyon: Drop Golden Mountain Software (03888.HK) target price to 35.5 Hong Kong dollars, game business is expected to continue under pressure.

Zhixin Finance APP learned that Lyon released a research report stating that Kingsoft Corporation (03888.HK) third-quarter revenue fell below expectations, dragged down by its gaming business. Gaming revenue decreased by 47% year-on-year, 8% lower than the bank's expectations, due to pressure from major game works under abnormally high base numbers last year. Office software revenue growth accelerated, rising by 26% year-on-year, driven by progress in government information technology applications and the promotion of WPS365. Personal paid users saw steady growth, with average revenue per user (ARPU) stabilizing. The bank believes that the gaming business will continue to face pressure in the coming quarters, but the office software business may maintain strong momentum. Revenue forecast for 2025 and 2026 were lowered by 3% and 4%, respectively, net profit forecast was cut by 15% and 18%, and the target price was reduced from 37.8 Hong Kong dollars to 35.5 Hong Kong dollars, maintaining an outperform rating in the market.