Lyon: Goldman Sachs downgrades Kingsoft Corporation's target price to 29.1 Hong Kong dollars with a rating of "outperforming the market".

Lion City issued a research report stating that Kingsoft's revenue in the fourth quarter of last year met expectations, but reflecting weak fundamentals, it lowered its valuation multiples and increased the estimated discount for its holding company, with the target price being reduced from HK$35.5 to HK$29.1, maintaining its rating as "outperforming the market". The revenue from the gaming business decreased by 33% year-on-year, higher than the bank's expectations by 1.5%, mainly due to the high base in the same period of the previous fiscal year, leading to pressure on popular games. Revenue from the office software business increased by 17% year-on-year, mainly benefiting from strong growth in WPS365 and accelerated development in to-C business. The bank expects this year to be a year of transformation for the gaming business, especially in terms of leadership and strategic adjustments. Although the bank predicts that the revenue from its gaming business will decrease by around 10% to 19% year-on-year, revenue from the office software business will accelerate to a growth of 20% year-on-year. Considering the negative factors brought by the gaming business, the bank has lowered its revenue forecast for Kingsoft this year and next year by 7%, with operating profit forecasts for each year being lowered by 21% and 16% respectively.