<Research>CLSA Reduces KINGSOFT's Target Price to HKD37.8; Anticipates Profit Pressure Across Business Segments
KINGSOFT's Financial Performance: KINGSOFT's 2Q25 game revenue and profit fell short of expectations, with challenges anticipated for its gaming business in the second half of 2025, according to CLSA.
KINGSOFT OFFICE Growth: KINGSOFT OFFICE experienced accelerated growth in enterprise revenue, steady performance from WPS365, but a slowdown in personal-end revenue.
KINGSOFT CLOUD Success: KINGSOFT CLOUD maintained strong revenue, particularly in its AI-related business, despite facing short selling pressures.
Target Price Adjustments: CLSA adjusted target prices for KINGSOFT and KINGSOFT CLOUD, lowering KINGSOFT's from HKD38.4 to HKD37.8 while raising Kingsoft Cloud's from USD17.3 to USD17.7, maintaining an Outperform rating for all three companies.
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<BofAS Analysis> Ratings and Target Prices for Chinese Software Stocks (Table)
Stock Performance: KINGDEE INT'L saw a 3.56% increase in shares, with a short selling ratio of 28.13%, while MEITU and KINGSOFT CLOUD also experienced gains of 3.1% and 3.06%, respectively.
Analyst Ratings: BofAS has identified KINGDEE INT'L, MEITU, and KINGSOFT OFFICE as top picks among Chinese software stocks, while M Stanley anticipates further collaboration between MEITU and Alibaba, assigning a target price of $15.7.
Short Selling Data: The short selling amounts for various companies include KINGSOFT at $84.43M and WEIMOB INC at $14.20M, indicating varying levels of market skepticism.
Market Outlook: Ratings for KINGSOFT have shifted from "Buy" to "Neutral," reflecting a change in investor sentiment, with target prices adjusted accordingly.
Analysis: HSTECH's Top 5 Strongest and Weakest Stocks for 2025 (Table)
Top 5 Strongest Stocks: The strongest stocks in HSTECH for 2025 include HUA HONG SEMI (+243.2%), HORIZONROBOT-W (+140.6%), SMIC (+124.7%), JD HEALTH (+97.5%), and BABA-W (+77.5%), with significant short selling ratios noted for each.
Top 5 Weakest Stocks: The weakest stocks in HSTECH for 2025 are MEITUAN-W (-31.9%), LI AUTO-W (-31%), BYD ELECTRONIC (-20%), JD-SW (-17.9%), and KINGSOFT (-15.5%), with varying short selling amounts and ratios.
Market Performance: The HSTECH index concluded 2025 with a gain of 1,047 points, representing a 23.5% increase, closing at 5,515.
Short Selling Data: The short selling data reflects significant activity, particularly in stocks like BABA-W and MEITUAN-W, indicating investor sentiment and market dynamics as of December 31, 2025.
<Research> CGS Begins Coverage of KINGSOFT (03888.HK) with a Buy Recommendation
Company Overview: KINGSOFT (03888.HK) is a leading domestic office software company with a positive outlook driven by AI advancements and strategic changes in its gaming business.
Brokerage Coverage: China Galaxy Securities (CGS) has initiated coverage on KINGSOFT, giving it a "Recommend" rating based on its growth potential.
Revenue Projections: CGS forecasts KINGSOFT's revenue for 2025-2027 to reach RMB10.568 billion, RMB11.608 billion, and RMB13.4 billion, with respective growth rates of 2.43%, 9.83%, and 15.44%.
Earnings Per Share (EPS): The projected EPS for KINGSOFT is expected to be RMB1, RMB1.11, and RMB1.31 for the years 2025, 2026, and 2027, respectively.
HSI Closes with a 10-Point Decline; Chip Stocks Weaken; ZTE Plummets 13%
Market Performance: The HSI closed down 10 points at 25,530, with the HSCEI and HSTECH also experiencing declines, while total market turnover reached HKD182.477 billion.
Stock Movements: BABA-W fell 1.7% amid reports of increased resale prices for its AI glasses, while KUAISHOU-W and NTES-S also saw minor declines despite new initiatives and game pre-registrations.
Tech Sector Trends: Major tech stocks like TENCENT and BILIBILI-W experienced slight decreases, while BIDU-SW and MEITUAN-W posted modest gains.
Chip and Other Stocks: Chip stocks SMIC and HUA HONG SEMI declined, with ZTE suffering a significant drop of 13.1%, reflecting broader challenges in the sector.
HKEX Launches HKEX Tech 100 Index Covering 100 Leading Tech Companies
- Index Expansion: HKEX has launched the HKEX Tech 100 Index, which tracks 100 Hong Kong-listed companies across six innovative themes, marking a significant investment in the vibrancy of the region's capital market ecosystem.
- Global Investment Opportunities: All constituents are eligible for Southbound trading, ensuring broad accessibility for global and Chinese Mainland investors, thereby enhancing the attractiveness and liquidity of the Hong Kong market.
- ETF Development: HKEX has entered into a licensing agreement with E Fund Management to introduce an ETF based on the HKEX Tech 100 in the Chinese Mainland, addressing strong market demand for investment opportunities in Hong Kong's tech sector.
- Fast-Entry Mechanism: The new index incorporates a fast-entry mechanism that allows newly-listed companies meeting specific criteria to join outside the regular review cycle, thereby enhancing the index's dynamism and market adaptability.
HSI Declines by 61 Points at Midday; GAC Surges 12%; SERES Drops 7%
Market Performance: The HSI fell by 0.2% to 25,884, while the HSCEI also dipped 0.2% to 9,144; the HSTECH saw a slight increase of 0.1% to 5,603, with total turnover for the morning session at HK$75.496 billion.
Gaming Approvals: In November, 178 domestically produced online games were approved in mainland China, including titles from BIDU-SW and BILIBILI-W, which saw respective share price movements of +0.8% and -0.4%.
Tech Stock Movements: JD-SW gained 0.9% after receiving conditional approval for an acquisition, while other tech stocks like BABA-W rose 0.7%, and TENCENT, MEITUAN-W, and KUAISHOU-W experienced declines between 0.2% and 0.6%.
Auto Sector Highlights: GAC GROUP surged 12.1% following the delivery of its Aion UT Super, while SERES dropped 7.8%. BYD COMPANY and HORIZONROBOT-W saw minor increases, while CATL experienced a slight decline of 1.1%.
<BofAS Analysis> Ratings and Target Prices for Chinese Software Stocks (Table)
Stock Performance: KINGDEE INT'L saw a 3.56% increase in shares, with a short selling ratio of 28.13%, while MEITU and KINGSOFT CLOUD also experienced gains of 3.1% and 3.06%, respectively.
Analyst Ratings: BofAS has identified KINGDEE INT'L, MEITU, and KINGSOFT OFFICE as top picks among Chinese software stocks, while M Stanley anticipates further collaboration between MEITU and Alibaba, assigning a target price of $15.7.
Short Selling Data: The short selling amounts for various companies include KINGSOFT at $84.43M and WEIMOB INC at $14.20M, indicating varying levels of market skepticism.
Market Outlook: Ratings for KINGSOFT have shifted from "Buy" to "Neutral," reflecting a change in investor sentiment, with target prices adjusted accordingly.
Analysis: HSTECH's Top 5 Strongest and Weakest Stocks for 2025 (Table)
Top 5 Strongest Stocks: The strongest stocks in HSTECH for 2025 include HUA HONG SEMI (+243.2%), HORIZONROBOT-W (+140.6%), SMIC (+124.7%), JD HEALTH (+97.5%), and BABA-W (+77.5%), with significant short selling ratios noted for each.
Top 5 Weakest Stocks: The weakest stocks in HSTECH for 2025 are MEITUAN-W (-31.9%), LI AUTO-W (-31%), BYD ELECTRONIC (-20%), JD-SW (-17.9%), and KINGSOFT (-15.5%), with varying short selling amounts and ratios.
Market Performance: The HSTECH index concluded 2025 with a gain of 1,047 points, representing a 23.5% increase, closing at 5,515.
Short Selling Data: The short selling data reflects significant activity, particularly in stocks like BABA-W and MEITUAN-W, indicating investor sentiment and market dynamics as of December 31, 2025.
<Research> CGS Begins Coverage of KINGSOFT (03888.HK) with a Buy Recommendation
Company Overview: KINGSOFT (03888.HK) is a leading domestic office software company with a positive outlook driven by AI advancements and strategic changes in its gaming business.
Brokerage Coverage: China Galaxy Securities (CGS) has initiated coverage on KINGSOFT, giving it a "Recommend" rating based on its growth potential.
Revenue Projections: CGS forecasts KINGSOFT's revenue for 2025-2027 to reach RMB10.568 billion, RMB11.608 billion, and RMB13.4 billion, with respective growth rates of 2.43%, 9.83%, and 15.44%.
Earnings Per Share (EPS): The projected EPS for KINGSOFT is expected to be RMB1, RMB1.11, and RMB1.31 for the years 2025, 2026, and 2027, respectively.
HSI Closes with a 10-Point Decline; Chip Stocks Weaken; ZTE Plummets 13%
Market Performance: The HSI closed down 10 points at 25,530, with the HSCEI and HSTECH also experiencing declines, while total market turnover reached HKD182.477 billion.
Stock Movements: BABA-W fell 1.7% amid reports of increased resale prices for its AI glasses, while KUAISHOU-W and NTES-S also saw minor declines despite new initiatives and game pre-registrations.
Tech Sector Trends: Major tech stocks like TENCENT and BILIBILI-W experienced slight decreases, while BIDU-SW and MEITUAN-W posted modest gains.
Chip and Other Stocks: Chip stocks SMIC and HUA HONG SEMI declined, with ZTE suffering a significant drop of 13.1%, reflecting broader challenges in the sector.
HKEX Launches HKEX Tech 100 Index Covering 100 Leading Tech Companies
- Index Expansion: HKEX has launched the HKEX Tech 100 Index, which tracks 100 Hong Kong-listed companies across six innovative themes, marking a significant investment in the vibrancy of the region's capital market ecosystem.
- Global Investment Opportunities: All constituents are eligible for Southbound trading, ensuring broad accessibility for global and Chinese Mainland investors, thereby enhancing the attractiveness and liquidity of the Hong Kong market.
- ETF Development: HKEX has entered into a licensing agreement with E Fund Management to introduce an ETF based on the HKEX Tech 100 in the Chinese Mainland, addressing strong market demand for investment opportunities in Hong Kong's tech sector.
- Fast-Entry Mechanism: The new index incorporates a fast-entry mechanism that allows newly-listed companies meeting specific criteria to join outside the regular review cycle, thereby enhancing the index's dynamism and market adaptability.
HSI Declines by 61 Points at Midday; GAC Surges 12%; SERES Drops 7%
Market Performance: The HSI fell by 0.2% to 25,884, while the HSCEI also dipped 0.2% to 9,144; the HSTECH saw a slight increase of 0.1% to 5,603, with total turnover for the morning session at HK$75.496 billion.
Gaming Approvals: In November, 178 domestically produced online games were approved in mainland China, including titles from BIDU-SW and BILIBILI-W, which saw respective share price movements of +0.8% and -0.4%.
Tech Stock Movements: JD-SW gained 0.9% after receiving conditional approval for an acquisition, while other tech stocks like BABA-W rose 0.7%, and TENCENT, MEITUAN-W, and KUAISHOU-W experienced declines between 0.2% and 0.6%.
Auto Sector Highlights: GAC GROUP surged 12.1% following the delivery of its Aion UT Super, while SERES dropped 7.8%. BYD COMPANY and HORIZONROBOT-W saw minor increases, while CATL experienced a slight decline of 1.1%.
