HK Stock Market Move | KINGSOFT(03888) falls more than 4% New game "Limit Breaker" performs below expectations CICC lowers full-year game revenue growth forecast

KINGSOFT (03888) fell more than 4%, as of the time of publication, down 4.06% to HK$34.3, with a turnover of HK$403 million. On the news front, Morgan Stanley recently released a research report stating that it downgraded KINGSOFT's rating from "hold" to "in line with the market" due to the underperformance of its main game "Swordsman". Monetization of office software AI still faces difficulties. Morgan Stanley also reduced KINGSOFT's game revenue forecast for 2025 to 2027 by 11% to 13%, and EPS forecast by 25% to 30%. The target price was lowered from HK$45 to HK$41. CICC also stated that it expects KINGSOFT's revenue in the second quarter to be RMB 2.29 billion, a year-on-year decrease of 7.5%; it is expected that the growth of the office business will recover, while the game business will be under pressure due to a high base number. The bank pointed out that the sequel to the Swordsman series, "Swordsman Zero," began full platform public testing on May 29 and had a lackluster performance after going online; the new sci-fi mecha game "Swordsman" also began global public testing on July 2, with a peak simultaneous online player count on Steam exceeding 130,000 on the first day of public testing. Based on cautious assumptions about the performance of new games and the sustainability of old games, the bank revised its forecast for the full-year game revenue growth rate from 5% to flat.