HK Hot Stock: Kingsoft (03888.HK) Analysis

Kingsoft (03888.HK) operates in the Communication Services sector, focused on Electronic Gaming & Multimedia with two core businesses: WPS Office (integrated AI features) and game development (西山居、金山世游)[0].
The hot list appearance on December 25 aligns with the previous trading day’s (December 24) activity, as the Hong Kong market was closed for Christmas[0]. Key market data for December 24:

• Closing price: HKD 28.42 (+0.57% vs. previous close)
• 52-week range: HKD 27.24 (low) - 47.50 (high)
• Volume: 2.1 million (significantly below the 15.4 million daily average)[0]

Broader market trends contribute to its popularity: Investors are increasingly turning to Chinese AI stocks due to lofty U.S. AI valuations; the Hang Seng Tech Index has a lower P/E ratio than the Nasdaq, enhancing the attractiveness of Hong Kong tech stocks. Kingsoft’s WPS AI product positions it as a beneficiary of this AI theme[0].

Analysts maintain a one-year target price of HKD 41.04, implying a 44% upside from the current price. However, Q3 2025 earnings (announced November 24) were weak: revenue declined 17% YoY, and operating profit fell 75.8% due to underperformance in the game business[0].

1. AI sector shift as systemic driver
   : Kingsoft’s hot list appearance is part of a broader market trend (investors reallocating to undervalued Chinese AI stocks) rather than an isolated company event[0].
2. Valuation-disparity attention
   : The stock’s proximity to its 52-week low, combined with a 44% analyst target price upside, creates a strong catalyst for investor attention[0].
3. Low volume fragility
   : Despite being a hot stock, daily volume (2.1 million) is well below average, indicating potentially weak short-term trading sentiment[0].

• Risks
  :
  • Q3 earnings weakness driven by the underperforming game business[0].
  • Low trading volume suggests limited market depth for short-term moves[0].
  • Ongoing policy uncertainty in Chinese tech stocks[0].

• Opportunities
  :
  • AI-driven growth potential in the WPS Office business[0].
  • Potential recovery in the game business with new releases or market expansion[0].
  • Broader AI sector revaluation boosting Hong Kong tech stocks[0].

Kingsoft (03888.HK) is a Communication Services company with WPS Office and game development businesses. Its hot list appearance on Christmas Day 2025 (UTC+8) is due to the broader AI theme in Hong Kong tech and bargain-hunting near its 52-week low. The stock closed at HKD 28.42 on December 24 with low volume (2.1 million). Analysts target a 44% upside, but the company faces headwinds from weak Q3 game business earnings.