SEHK:3888

Stock Analysis Report

Executive Summary

Kingsoft Corporation Limited, an investment holding company, operates as a software and Internet service company in Mainland China, Hong Kong, and internationally.


Snowflake Analysis

High growth potential with adequate balance sheet.


Similar Companies

Share Price & News

How has Kingsoft's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 3888's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

15.0%

3888

8.1%

HK Software

7.4%

HK Market


1 Year Return

20.2%

3888

4.2%

HK Software

-22.7%

HK Market

Return vs Industry: 3888 exceeded the Hong Kong Software industry which returned 5% over the past year.

Return vs Market: 3888 exceeded the Hong Kong Market which returned -20.3% over the past year.


Shareholder returns

3888IndustryMarket
7 Day15.0%8.1%7.4%
30 Day0.4%-2.9%-11.2%
90 Day25.2%20.0%-17.3%
1 Year20.2%20.2%4.5%4.2%-19.9%-22.7%
3 Year19.3%18.2%31.1%29.7%-5.3%-14.8%
5 Year8.7%6.5%5.5%0.1%-8.7%-23.4%

Price Volatility Vs. Market

How volatile is Kingsoft's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Kingsoft undervalued compared to its fair value and its price relative to the market?

2.57x

Price to Book (PB) ratio


Share Price vs. Fair Value

Below Fair Value: 3888 (HK$24.85) is trading above our estimate of fair value (HK$17.39)

Significantly Below Fair Value: 3888 is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: 3888 is unprofitable, so we can't compare its PE Ratio to the Software industry average.

PE vs Market: 3888 is unprofitable, so we can't compare its PE Ratio to the Hong Kong market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate 3888's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: 3888 is overvalued based on its PB Ratio (2.5x) compared to the HK Software industry average (1.1x).


Next Steps

Future Growth

How is Kingsoft forecast to perform in the next 1 to 3 years based on estimates from 14 analysts?

96.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 3888 is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (1.6%).

Earnings vs Market: 3888 is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: 3888's is expected to become profitable in the next 3 years.

Revenue vs Market: 3888's revenue (28.6% per year) is forecast to grow faster than the Hong Kong market (9.9% per year).

High Growth Revenue: 3888's revenue (28.6% per year) is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 3888's Return on Equity is forecast to be low in 3 years time (8.1%).


Next Steps

Past Performance

How has Kingsoft performed over the past 5 years?

-40.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 3888 is currently unprofitable.

Growing Profit Margin: 3888 is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: 3888 is unprofitable, and losses have increased over the past 5 years at a rate of -40.5% per year.

Accelerating Growth: Unable to compare 3888's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: 3888 is unprofitable, making it difficult to compare its past year earnings growth to the Software industry (11.7%).


Return on Equity

High ROE: 3888 has a negative Return on Equity (-13.34%), as it is currently unprofitable.


Next Steps

Financial Health

How is Kingsoft's financial position?


Financial Position Analysis

Short Term Liabilities: 3888's short term assets (CN¥17.3B) exceed its short term liabilities (CN¥4.9B).

Long Term Liabilities: 3888's short term assets (CN¥17.3B) exceed its long term liabilities (CN¥3.9B).


Debt to Equity History and Analysis

Debt Level: 3888's debt to equity ratio (27.4%) is considered satisfactory.

Reducing Debt: 3888's debt to equity ratio has reduced from 45.9% to 27.4% over the past 5 years.


Balance Sheet

Inventory Level: 3888 has a low level of unsold assets or inventory.

Debt Coverage by Assets: 3888's debt is covered by short term assets (assets are 4x debt).


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: 3888 has been profitable on average in the past, therefore cash runway is not a concern.

Forecast Cash Runway: 3888 has been profitable on average in the past, therefore cash runway is not a concern.


Next Steps

Dividend

What is Kingsoft's current dividend yield, its reliability and sustainability?

0.39%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: 3888's dividend (0.4%) isn’t notable compared to the bottom 25% of dividend payers in the Hong Kong market (2.67%).

High Dividend: 3888's dividend (0.4%) is low compared to the top 25% of dividend payers in the Hong Kong market (7.29%).


Stability and Growth of Payments

Stable Dividend: 3888 is not paying a notable dividend for the Hong Kong market, therefore no need to check if payments are stable.

Growing Dividend: 3888 is not paying a notable dividend for the Hong Kong market, therefore no need to check if payments are increasing.


Current Payout to Shareholders

Dividend Coverage: 3888 is not paying a notable dividend for the Hong Kong market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of 3888's dividend in 3 years as they are not forecast to pay a notable one for the Hong Kong market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

3.3yrs

Average management tenure


CEO

Tao Zou (44yo)

3.25s

Tenure

CN¥1,820,000

Compensation

Mr. Tao Zou has been the Chief Executive Officer and Executive Director of Kingsoft Corporation Limited since December 1, 2016 and August 25, 2009 respectively and also served as its Senior Vice President  ...


CEO Compensation Analysis

Compensation vs Market: Tao's total compensation ($USD256.49K) is below average for companies of similar size in the Hong Kong market ($USD488.81K).

Compensation vs Earnings: Tao's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Jun Lei
Co-Founder & Chairman8.67yrsCN¥357.00k12.8% CN¥4.3b
Tao Zou
CEO & Executive Director3.25yrsCN¥1.82m0.12% CN¥40.0m
Yuk Keung Ng
CFO, Joint Company Secretary & Executive Director7yrsCN¥1.91m0.078% CN¥26.5m
Francie Lu
IR Directorno datano datano data
Wei Liu
Senior Vice President7.83yrsno datano data
Yulin Wang
Senior Vice President3.25yrsno datano data
Wai Wai Kwok
Senior Vice President2yrsno datano data
Hongyu LV
Joint Company Secretary1.25yrsno datano data
Quanguo Wang
Vice President17.17yrsno datano data
Hongjiang Zhang
Consultant3.25yrsno datano data

3.3yrs

Average Tenure

44yo

Average Age

Experienced Management: 3888's management team is considered experienced (3.3 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Jun Lei
Co-Founder & Chairman8.67yrsCN¥357.00k12.8% CN¥4.3b
Tao Zou
CEO & Executive Director3.25yrsCN¥1.82m0.12% CN¥40.0m
Yuk Keung Ng
CFO, Joint Company Secretary & Executive Director7yrsCN¥1.91m0.078% CN¥26.5m
Chi Ping Lau
Non-Executive Director8.67yrsno datano data
Pak Kwan Kau
Non-Executive Director8.42yrsCN¥325.00k7.54% CN¥2.6b
Yuen Kwan Tang
Independent Non-Executive Director6.83yrsCN¥325.00kno data
Shun Wong
Independent Non-Executive Director5.67yrsCN¥325.00kno data
Wenjie Wu
Independent Non-Executive Director7yrsCN¥352.00kno data

7.7yrs

Average Tenure

52yo

Average Age

Experienced Board: 3888's board of directors are considered experienced (7.7 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: 3888 insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Kingsoft Corporation Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Kingsoft Corporation Limited
  • Ticker: 3888
  • Exchange: SEHK
  • Founded: 1988
  • Industry: Application Software
  • Sector: Software
  • Market Cap: HK$33.934b
  • Shares outstanding: 1.37b
  • Website: https://www.kingsoft.com

Number of Employees


Location

  • Kingsoft Corporation Limited
  • Kingsoft Tower
  • No. 33 Xiaoying West Road
  • Beijing
  • 100085
  • China

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
3888SEHK (The Stock Exchange of Hong Kong Ltd.)YesOrdinary SharesHKHKDOct 2007
3K1DB (Deutsche Boerse AG)YesOrdinary SharesDEEUROct 2007
KSFT.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDOct 2007
3888SHSC (Stock Exchange of Hong Kong Limited - Shanghai - Hong Kong Stock Connect)YesOrdinary SharesHKHKDOct 2007
3888SZSC (The Stock Exchange of Hong Kong - Shenzhen - Hong Kong Stock Connect)YesOrdinary SharesHKHKDOct 2007

Biography

Kingsoft Corporation Limited, an investment holding company, operates as a software and Internet service company in Mainland China, Hong Kong, and internationally. It operates through three segments: Entertainment Software; Cloud Services; and Office Software and Services and Others. The Entertainment Software segment engages in the research and development of games; and provision of online games, mobile games, and casual game services. The Cloud Services segment provides cloud storage and cloud computation services. The Office Software and Services and Others segment designs, researches and develops, sells, and markets office software products and services of WPS Office. The company also engages in the operation and distribution of games; marketing and distribution of application software; research and development of application technology; research and development of software; marketing and operation of SMS, and wireless service of online games and application software; sale and operation of office application software; marketing and operation of entertainment software products; and research, development, and distribution of consumer application software. Kingsoft Corporation Limited was founded in 1988 and is headquartered in Beijing, the People’s Republic of China. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/03/31 13:25
End of Day Share Price2020/03/31 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.