Kingnet Sales Outlook Brightens, but Profit Lags — Market Talk

What happened

Citi cut Kingnet's 2026-2028 profit estimates by 4%-6% but raised revenue forecasts by 4%-11%, citing its top game Lie Yan Jue Xing lasting longer than expected and upcoming new games. Citi lowered its target price to 22 yuan from 23 yuan, keeping a buy rating.

Confirmed

Global impact / market context

Higher revenue with lower profit means Kingnet spends heavily on ads to keep players, which eats into profit per sale. Investors should watch whether this spending pays off through longer player retention and future game releases, since profit estimates fell even as sales forecasts improved.

Analyst inference

Stronger sales forecasts and new games may offset reduced profit estimates and a lower target price. Kingnet's early artificial-intelligence bets, from companions to toys and glasses, are long-run options that may not add revenue soon but could support growth if they succeed.

Analyst inference

What to watch

1. Citi lowered its target price to 22 yuan from 23 yuan but kept a buy rating, implying analysts still see upside despite weaker profit estimates for 2026 through 2028. Confirmed
2. Watch whether Kingnet's heavy advertising for Lie Yan Jue Xing continues, since the analyst says this spending may support longer player retention but could weigh on the bottom line. Proposed
3. Track revenue from upcoming new games and any progress in artificial-intelligence products, because Citi's higher sales forecasts depend on these contributions arriving as expected. Analyst inference

Evidence

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