20180814-兴业金融证券-金山软件-03888.HK-Profit_Warning_5页_254kb

Kingsoft 2H18 Profit Warning Summary

Core Content

Kingsoft issued a profit warning for its 3Q18 and full-year 2018 results, citing three main reasons for the expected losses:

1. Delay in the launch of JX Mobile III: Originally planned for October 2018, the launch is now expected in early 2019, which could reduce 2018 profits by CNY300-400 million.
2. Losses in the competitive cloud business: The company is now guiding that losses in this segment will be larger than last year's, indicating a worsening situation.
3. R&D investments in office software businesses: Increased spending on R&D is contributing to financial pressure.

Key Financial Metrics

Main Views and Key Information

• Profit Warning: Kingsoft's 3Q18 and full-year 2018 results may be loss-making due to the aforementioned reasons.
• Share Price Evaluation: The company's share price has not yet fully reflected these negative factors, and the analyst believes the market may react with a downward correction.
• Rating and Target Price: The analyst has placed the "Buy" rating and HKD32.52 target price under review, pending the release of the annual results on 21 August 2018.
• Market Uncertainty: The potential further delay of JX Mobile III could affect the company's performance in 2019 as well.
• Analyst: Yujie Li, with contact details provided.

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Contact Information