Lyon: Lowered target price for KINGSOFT (03888) to 29.1 Hong Kong dollars, the gaming business will face transformation this year.

Lyon released a research report stating that it is expected that KINGSOFT (03888) will experience a transformative year in its gaming business in 2026, facing changes in leadership and strategy. It is predicted that gaming revenue will decline by more than ten percentage points year-on-year, but revenue from office software is expected to accelerate to a 20% year-on-year growth. The bank has lowered the group's revenue forecast for the next two years by 7%, and also lowered the operating profit forecast by 21% and 16% to reflect unfavorable factors related to gaming. The bank has lowered KINGSOFT's target price from HK$35.5 to HK$29.1 and maintains a "outperform" rating.