iphonegamesthatearncrypto| CICC: Maintain Jinshan Software's "Outperform Industry" rating target price of HK$30

CICC released a research report sayingIphonegamesthatearncryptoTo maintain the "outperform industry" rating of Kingsoft (03888), and the revenue forecast for 2024 / 25 is basically unchanged; based on a more prudent expectation of investment increase, the net profit of 2024 is lowered by 12% to 9%.IphonegamesthatearncryptoThe profit forecast for 2025 will remain basically unchanged, with a target price of HK $30. The bank expects Kingsoft revenue for the first quarter of 2024 to be 21.Iphonegamesthatearncrypto.4.8 billion yuan, an increase of 9% over the same period last year; the operating profit for the current quarter is expected to be 610 million yuan, with a corresponding operating profit margin of 28.4%, an increase of 5 percentage points over the same period last year, mainly due to a decrease in market investment in the game business compared with the same period last year.

The main points of CICC are as follows:

Game business: lay the groundwork for new games online, and the stock game market invested in strategic contraction in the first quarter.

The bank expects game business revenue in the first quarter of 2024 to be basically the same as the same period last year, with a month-on-month decline, mainly due to the convergence of game operations at the PC end of "sword net 3" and the natural decline of current mobile games in the life cycle of existing mobile games.

In terms of PC games, the "Sword net 3" expansion "Fog Sea Hunting Dragon" opened its public test on April 25; in order to stagger with the PC game materials, and at the same time further polish the three-end interworking play experience, the launch time of "sword net 3 without boundaries" on the whole platform has been delayed, and the bank is expected to be launched at the end of the second quarter.

In terms of mobile games, the annual version of the company's classic IP "Jianxiaqingyuan" heritage work "Swordsman World: the Origin" was officially tested in March this year; in addition, the company's secondary shooting mobile game "Dust and White restricted Zone", which was launched in July 2023, has warmed up compared with last year after its launch in April: GameLook estimates that the global estimated flow including foreign services is more than 40 million yuan from April 6 to May 6 this year. As of May 14, 2024, the "Dust White restricted area" is in iOS.

App

Store ranks fourth on the list of free games, with a significant improvement from the previous month. The bank expects its good performance to mark a harvest in the company's deep ploughing in vertical mobile games and may be good for generating revenue in the second quarter of this year.

In terms of new travel, the company is working on the PVP machine A game "Unlimiter (Code)"

Break) was approved by the client and PS5 version number in March 2024.

Office business: continuously promote the optimization of AI product experience.

The bank expects office revenue to grow 16.5% year-on-year to 1.225 billion yuan in the first quarter of 2024, with solid growth in personal and institutional subscriptions, partly offset by declines in institutional licensing and Internet advertising. On April 9, 2024, the company released WPS, a new productivity platform for office.

365, including upgraded WPS Office, the latest WPS AI Enterprise Edition, and WPS collaboration; this product opens the doorIphonegamesthatearncryptoDocument, AI, collaboration three major capabilities, so that seamless switching between the components.

Management said that WPS

All kinds of tools of 365 have built-in artificial intelligence application WPS with large language modeling ability.

AI provides users with functions such as expansion, abbreviation, summary, formula generation and so on. Users can use a tool to call all kinds of mainstream models and achieve full scene coverage of writing, communication and meetings in one interface. The bank believes that the company's leading concept of "one-stop AI office" is expected to improve user productivity, thereby further improving user payment conversion rates and customer unit prices.

Risk: the development of new business and games is not as expected; the pace of domestic substitution of office business is not as fast as expected.