Analysis of Kingsoft Corporation's (03888.HK) Short-Term Uptick: Driven by AI Empowerment and Business Transformation

Kingsoft Corporation (03888.HK) rose on January 2, 2026, mainly driven by two factors: First, Galaxy Securities initiated coverage with a “Buy” rating, highlighting the company’s AI-empowered office software business and the transformation potential of its gaming business [1]. The report shows that WPS AI has significantly improved user activity and paid conversion rates; B-end WPS 365 revenue grew 71.61% year-on-year in Q3 2025, and government AI products have been implemented in central and local party and government agencies. Second, the gaming business is actively transforming: the PC game centered on the “Jian Wang 3” IP remains vibrant, user return has been significant after the launch of the cross-platform version “Jian Wang 3 Wujie”, and the company is actively expanding into new game categories and promoting overseas expansion [1].

In terms of price, according to ETF holdings data, the company’s stock rose approximately 9.8% to HK$29.18 on January 2, 2026 [3]. Although specific trading volume data is lacking, the sharp price increase reflects the market’s positive response to the analyst rating. During the same period, the AI sector performed strongly overall; events such as Baidu Kunlunxin submitting an IPO application further increased market attention to AI-related enterprises [2]. Technically, the price has sharply broken through the recent consolidation range, indicating strong short-term bullish momentum [1].

Kingsoft’s rise reflects market recognition of the value of AI empowering traditional software businesses. As a leading domestic office software, WPS’s implementation of AI functions has not only improved C-end user experience but also made significant progress in the B-end and government markets, providing a new growth engine for the company. The transformation of the gaming business demonstrates the company’s innovative capabilities in its traditional advantage areas; through IP operation and category expansion, it aims to reduce reliance on a single business. In addition, the overall enthusiasm for the AI sector provides a favorable market environment for the company’s stock price rise.

1. Short-term pressure on the gaming business: Revenue from online games and other businesses fell 47% year-on-year in Q3 2025, mainly due to declining revenue from existing games and new games still being in the early stages of building market influence [1].
2. Uncertainty about new game performance: There is a risk of differentiated market performance for the new category games (such as sci-fi and ACG) that the company is expanding into.
3. Valuation risk: After the sharp short-term price increase, attention needs to be paid to whether the valuation is reasonable [1].

1. Sustained growth potential of the AI-empowered office software business, especially the expansion in B-end and government markets.
2. Long-term growth potential from the successful transformation of the gaming business.
3. The sustained enthusiasm for the AI sector provides a favorable market environment for the company.

Kingsoft Corporation (03888.HK) rose approximately 9.8% on the first trading day of 2026, mainly driven by Galaxy Securities’ “Buy” rating and the enthusiasm for the AI sector. The company’s AI-empowered office software business and the transformation of its gaming business are key highlights, but short-term pressure on the gaming business and uncertainty about new game performance need to be noted. Investors should consider these factors comprehensively based on their own risk tolerance and investment horizon.