Kingsoft (SEHK:3888) Could Be 23% Undervalued On Stronger First Half 2026 Results
Kingsoft (SEHK:3888) is back in focus after reporting its second quarter and first half 2026 results on 19 August, with both revenue and net income higher than the same periods a year earlier.
See our latest analysis for Kingsoft.
Despite the recent earnings report sparking a 1 day share price return of 2.16% to HK$24.56, Kingsoft’s share price return is still down 15.83% year to date and its 1 year total shareholder return is down 29.19%. This suggests momentum has been weak overall despite the stronger second quarter and first half results.
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Kingsoft’s earnings are moving in a firmer direction, while the share price has lagged. Has most of the rerating already played out in this latest bounce, or is there still clear upside left in the valuation?
Most Popular Narrative: 22.7% Undervalued
Kingsoft’s most widely followed narrative points to a fair value of HK$31.77, compared with the latest close at HK$24.56, which implies a sizeable gap that investors are watching closely.
The analysts have a consensus price target of HK$31.77 for Kingsoft based on their expectations of its future earnings growth, profit margins and other risk factors.
Want to understand why analysts still see upside even with forecast earnings under pressure and a lower future margin profile? The narrative hinges on revenue growth, a reset profit base and a richer future earnings multiple that is more often associated with higher growth sectors.
Result: Fair Value of HK$31.77 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, investors in Kingsoft still need to weigh the pressure on gaming revenue and margins, along with weaker cash generation that could challenge the upbeat narrative.
Find out about the key risks to this Kingsoft narrative.
Another View on Kingsoft’s Valuation
The SWS DCF model presents a very different perspective for Kingsoft. At HK$24.56, the stock is described as trading 74% below an estimated future cash flow value of HK$94.51. This implies a much larger potential upside compared with the HK$31.77 fair value from the analyst narrative. How comfortable are you with that kind of gap in outcomes?
Look into how the SWS DCF model arrives at its fair value.
Next Steps
The mix of potential upside and clear risks around Kingsoft will feel different to every investor, so this is a good time to check the details yourself. To weigh both sides in one place, review the 3 key rewards and 2 important warning signs.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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