During the 2026 World Artificial Intelligence Conference (WAIC) in Shanghai, Kingsoft Office launched WPS Comate, positioning it as an AI agent capable of performing complex tasks. Goldman Sachs expects the application of AI agents on edge devices to become more widespread. The market will pay more attention to the ROI of AI agents to determine their long-term viability.
Goldman Sachs believes Kingsoft Office's valuation is too high and downgraded its rating from "Neutral" to "Sell". The bank's reasons are: 1. The increase in WPS AI's paid subscription rate and user adoption rate still needs time; 2. AI-native products launched by competitors have more competitive pricing; 3. End users currently lack clear AI use cases to prove its positive ROI; 4. Weakening spending by small business customers has suppressed subscription revenue contributions.
This means that Goldman Sachs' previous assumptions about enterprise and consumer subscription businesses may have been too aggressive. The target price was lowered from RMB 326 to RMB 201, and the updated 2027 E P/E ratio is 31 times, lower than the previous expectation of 45 times. However, if Kingsoft Office's new features drive higher-than-expected growth in individual user payment rates, if WPS 365's penetration rate among enterprise customers is faster than expected, or if user spending or adoption of WPS AI is significantly higher than currently assumed, then Kingsoft's target price may be revised upwards.
