Citi: Cuts Kingsoft Software's target price to HK$33, maintains "buy" rating.

Citigroup's research report stated that Kingsoft's first quarter revenue increased by 3% year-on-year, but decreased by 8% quarter-on-quarter, which met expectations. Adjusted net profit saw a significant year-on-year increase to 1.14 billion yuan. Looking ahead, the bank predicts that Kingsoft's gaming business may see a turning point in the fourth quarter of this year or early 2027. The bank lowered its revenue forecast for the fiscal years 2026 to 2028 by 2% to 10.2 billion, 11.3 billion, and 12.3 billion yuan respectively, to reflect the expected decline in the performance of the gaming business over the next one to two quarters. The bank raised this year's adjusted net profit forecast by 27%, reflecting a greater share of joint venture profits in the first quarter, but lowered the adjusted profit forecast for the next two years by 14% and 2% respectively, reflecting a decrease in the gaming business profit margin forecast. The bank lowered its target price from 35 Hong Kong dollars to 33 Hong Kong dollars, while maintaining a "buy" rating.