BPKSOFT@EC2604A(14257.HK)

The Hang Seng TECH Index fell over 2% intraday, KINGDEE INT'L dropped nearly 14%, and KINGSOFT fell nearly 6%

Software stocks suffer worst day in 10 months, widening the gap with hot chip stocks

Software stocks experienced their worst day in 10 months, with significant declines following disappointing earnings reports from Microsoft and ServiceNow. Investors are increasingly concerned about the potential disruption from low-cost AI tools, despite software companies' investments in AI. Microsoft and ServiceNow shares fell around 12%, while SAP dropped over 15%. The iShares Expanded Tech-Software Sector ETF declined 5.8%, marking its worst daily drop since April. In contrast, chip stocks continue to perform well, highlighting a stark divide in the tech sector.

GF Securities Remains a Buy on Kingsoft (KSFTF)

GF Securities analyst maintained a Buy rating on Kingsoft yesterday and set a price target of HK$50.25. The company’s shares closed last Wednesday at HK$30.56.Claim 50% Off TipRanks PremiumUnlock hedge fund-level data and powerful investing tools for smarter, sharper decisions Stay ahead of the market with the latest news and analysis and maximize your portfolio's potential The word on The Street in general, suggests a Strong Buy analyst consensus rating for Kingsoft with a HK$41.72 average price target.

Kingsoft (SEHK:3888) Valuation Check As Xiaomi Partnership Is Renewed And Expanded

Kingsoft (SEHK:3888) has renewed its partnership with Xiaomi, signing a six-year lease with Beijing Duokan. Despite a recent 5.98% share price increase, the stock has seen a 6.12% decline over the past year. Analysts suggest Kingsoft is undervalued, with a fair value of HK$40.87 per share, driven by growth in AI-enhanced office products. However, concerns remain about the gaming business and cash conversion. A DCF analysis indicates a fair value of HK$83.28, but the current P/E ratio of 25x suggests valuation risks if market sentiment shifts. Investors are encouraged to explore other tech opportunities.

Kingsoft Renews Three-Year Connected Transaction Framework with Xiaomi

Kingsoft Corporation has renewed its three-year connected transaction framework with Xiaomi Group, extending the agreement to December 31, 2028. The deal formalizes ongoing transactions, with Kingsoft providing services like promotion and game operations on Xiaomi's platforms, while Xiaomi offers promotional and ancillary services. As Lei Jun, a substantial shareholder, is associated with Xiaomi, the deal is classified as a connected transaction under Hong Kong rules, exempting it from independent shareholder approval. The renewal highlights the long-term partnership between the two companies. The current analyst rating for Kingsoft stock is a Hold with a price target of HK$30.00.