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As revealed in the report of CICC, KINGSOFT (03888.HK)  -2.300 (-11.917%)    Short selling $121.24M; Ratio 15.376%   issued a profit warning on 24 October. The company expected to record a substantial decline in operating profit in the third quarter, compared with the corresponding period of last year. As expected, the operating profit loss was attributable to surging R&D, marketing expense and share-based compensation.

CICC uplifted the operating revenue forecast of Kingsoft by 3.6% and 4% in 2014 and 2015, which was increased from RMB 3.2 billion and RMB 4.5 billion to RMB 3.3 billion and RMB 4.7 billion respectively. The projected earnings of 2014 and 2015 were lowered by 11.7% and 28.8%, from RMB 740 million and RMB 995 million to RMB 654 million and RMB 704 million. CICC lowered the target price of Kingsoft by 14%, from $22 to $19 and maintained the rating as Hold.

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