not vested
Q&A: Kingsoft Management On Gaming, Cloud, Cheetah; CICC Upgrades By Shuli Ren
Chinese Internet technology firm Kingsoft (3888.Hong Kong), parent company of U.S.-listed Cheetah Mobile (CMCM), soared 6.8% in Hong Kong today after reporting better-than-expected second-quarter earnings. The Hang Seng Composite Index was little changed.
Kingsoft’s
second quarter revenue jumped 38% from a year ago to 1.77 billion yuan, 6% above consensus estimates. Non-GAAP net profit rose 66% to 255 million yuan.
In addition to owning a 47% stake in Cheetah Mobile, a mobile app developer, Kingsoft does many things. It is a
game publisher, it provides cloud services and it sells word processing software.This blogger spoke with CEO Hong-Jiang Zhang and CFO Francis Ng this afternoon and asked them what was behind Kingsoft’s earnings beat.
Kingsoft’s share performance was also boosted by analyst upgrades today. CICC upgraded this stock to Buy with a new price target of 20 Hong Kong dollars, implying another 25% upside. In other words, there is still a good 25% conglomerate discount at Kingsoft, if you go with CICC’s estimates.
Analysts Kai Qian and Liping Zhao value the company using sum-of-the-parts analysis. Online games and word processing services are worth 9.5 billion and 5.4 billion yuan each based on 10 and 20 times their 2016 earnings estimate. Cheetah Mobile is worth 11 billion yuan, in line with its current market valuation. Cloud services is expected to generate 1 billion yuan in revenue this year and is valued at 10 billion yuan.
Source: Barron's Asia
http://blogs.barrons.com/asiastocks/201 ... -upgrades/
It's all about "how much you made when you were right" & "how little you lost when you were wrong"