Revenue and Profit Performance - Revenue for the three months ended September 30, 2024, was RMB 2,914.785 million, a 42% year-over-year increase and an 18% quarter-over-quarter increase[3] - Operating profit for the three months ended September 30, 2024, was RMB 1,144.118 million, a 204% year-over-year increase and a 44% quarter-over-quarter increase[3] - Net profit attributable to the parent company's shareholders for the three months ended September 30, 2024, was RMB 413.449 million, a 1,351% year-over-year increase and a 5% quarter-over-quarter increase[3] - Revenue for Q3 2024 reached RMB 2,914.8 million, a 42% YoY increase and an 18% QoQ growth[34] - Revenue for Q3 2024 reached RMB 2,914.8 million, a 42% YoY increase and an 18% QoQ growth[54] - Gross profit for the three months ended September 30, 2024, was RMB 2,454.444 million, a 46% year-over-year increase[8] - Gross profit for Q3 2024 was RMB 2,454.4 million, up 46% YoY and 20% QoQ, with a gross margin of 84%, up 3 percentage points YoY and 1 percentage point QoQ[35] - Operating profit before share-based compensation for Q3 2024 was RMB 1,202.4 million, up 168% YoY and 37% QoQ[41] - Net profit attributable to the parent company for Q3 2024 was RMB 413.4 million, compared to RMB 28.5 million in Q3 2023 and RMB 393.4 million in Q2 2024[45] Office Software and Services - Revenue from office software and services was RMB 1,206.815 million for the three months ended September 30, 2024, a 10% year-over-year increase[8] - Office software and services revenue for Q3 2024 was RMB 1,206.8 million, up 10% YoY and 2% QoY, driven by WPS AI 2.0 enhancements[34] - Office software and services revenue for Q3 2024 was RMB 1,206.8 million, up 10% YoY and 2% QoQ[54] - Domestic individual office subscription business continues to optimize WPS AI product features, enhancing user stickiness and payment conversion[55] - Domestic institutional subscription business steadily advances SaaS transformation with WPS 365, targeting large-scale private enterprises and local state-owned enterprises[55] - WPS AI innovations include text companion writing, AI Docs intelligent document library, and WPS Lingxi AI assistant, with the release of WPS HarmonyOS version[55] Online Games and Other Revenue - Revenue from online games and others was RMB 1,707.970 million for the three months ended September 30, 2024, a 78% year-over-year increase[8] - Online games and other revenue for Q3 2024 was RMB 1,708.0 million, a 78% YoY increase and 33% QoQ growth, boosted by strong performance of "JX3" and the successful launch of "JX3 Infinite"[34] - The company's gaming and other business revenue for Q3 2024 was RMB 1,708.0 million, a 78% YoY increase and a 33% QoQ growth[54] - "JX3" game shows strong resilience, with "JX3: Infinite" exceeding expectations in returning user numbers[55] - "JX3" annual expansion released in October, introducing new classes, level caps, and innovative gameplay[55] - Sci-fi mecha game "JX3: Limit Breaker" completed its first public test in August, with nearly 3 million global pre-registrations and ranking 17th on Steam wishlists[55] - Mobile game "JX3: Zero" has obtained a license and is planned for release next year[55] Research and Development - Research and development costs for the three months ended September 30, 2024, were RMB 860.931 million, a 28% year-over-year increase[8] - R&D costs for Q3 2024 were RMB 860.9 million, a 28% YoY increase and a 16% QoQ growth, driven by increased headcount for AI and collaboration product development[36] - The company will continue long-term investment in AI and collaboration to meet user needs in various office scenarios[56] User Metrics - Monthly active devices for the main office software products reached 618 million in September 2024, a 5% year-over-year increase and a 3% quarter-over-quarter increase[5] - Cumulative paying users for the main office software products reached 38.15 million in September 2024, a 15% year-over-year increase[5] Financial Position and Cash Flow - Total non-current assets as of September 30, 2024, were RMB 8,292.9 million, slightly down from RMB 8,301.5 million at the end of 2023[11] - Total current assets as of September 30, 2024, were RMB 28,143.5 million, up from RMB 26,893.2 million at the end of 2023[11] - Net cash generated from operating activities for Q3 2024 was RMB 1,387.3 million, compared to a net cash outflow of RMB 552.4 million in the same period last year[20] - Cash and cash equivalents at the end of Q3 2024 were RMB 2,202.5 million, down from RMB 2,430.9 million at the beginning of the quarter[23] - Total equity as of September 30, 2024, was RMB 27,668.9 million, up from RMB 26,573.3 million at the end of 2023[18] - The company's cash and bank deposits as of September 30, 2024, were RMB 20,483.1 million, slightly up from RMB 19,747.7 million at the end of 2023[25] - Cash and bank deposits, along with restricted cash, totaled RMB 20,483.1 million and RMB 3.2 million respectively, accounting for 56% of the company's total assets[48] - Net cash generated from operating activities for Q3 2024 was RMB 1,387.3 million, compared to a net cash outflow of RMB 552.4 million in Q3 2023 and a net cash inflow of RMB 1,045.2 million in Q2 2024[51] - Capital expenditures for Q3 2024 were RMB 108.6 million, down from RMB 159.7 million in Q3 2023 and RMB 49.7 million in Q2 2024[52] Earnings Per Share - Basic earnings per share for the three months ended September 30, 2024, were RMB 0.31, a 1,450% year-over-year increase[3] Overseas and AI Business - Overseas business maintains healthy growth[55] - The gaming business focuses on innovation and quality improvement to deliver exceptional global gaming experiences[56]

Financial Performance - For the six months ended June 30, 2024, total revenue reached RMB 4,610,641 thousand, a 10.7% increase from RMB 4,163,797 thousand in the same period of 2023[12]. - Operating profit for the six months ended June 30, 2024, was RMB 1,395,615 thousand, up 22.9% from RMB 1,136,015 thousand in the same period of 2023[14]. - The company reported a net profit of RMB 1,198,130 thousand for the six months ended June 30, 2024, a significant increase from RMB 605,725 thousand in 2023[14]. - The basic earnings per share for the six months ended June 30, 2024, was RMB 0.51, compared to RMB 0.18 in the same period of 2023[14]. - The gross profit for Q2 2024 was RMB 2,042.0 million, an 11% increase year-on-year and a 17% increase quarter-on-quarter, with a gross margin of 83%[21]. - The profit attributable to the company's owners for H1 2024 was RMB 677.9 million, compared to RMB 249.5 million in the same period last year[46]. - The company reported a profit of RMB 677,923,000 for the six months ended June 30, 2024, contributing to a total comprehensive income of RMB 706,576,000[138]. User Growth and Engagement - The number of cumulative paying users increased by 15% year-over-year, reaching 38.15 million as of June 30, 2024, compared to 33.24 million in 2023[9]. - Monthly active devices for key products remained stable at 602 million as of June 30, 2024, compared to 584 million in the same period of 2023[9]. Research and Development - Research and development costs for the six months ended June 30, 2024, were RMB 1,454,051 thousand, an increase from RMB 1,326,711 thousand in 2023[14]. - R&D expenses for Q2 2024 amounted to RMB 741.3 million, an 11% increase year-on-year and a 4% increase quarter-on-quarter[22]. - R&D expenses for H1 2024 were RMB 1,454.1 million, a 10% increase year-over-year, mainly due to increased investments in collaboration and AI[37]. - The company has continued to invest in the research and development of WPS Office software and gaming services, indicating a focus on innovation and market expansion[153]. Market Strategy and Future Plans - The company plans to continue expanding its market presence and investing in new product development to drive future growth[12]. - The company will continue to explore new market opportunities to enhance its existing business and expand into new markets[57]. - The company plans to invest approximately RMB 1,900 million in the construction of the Wuhan Park by June 30, 2024, to enhance R&D capabilities and attract talent[57]. Financial Position and Assets - As of June 30, 2024, the company's cash and bank deposits amounted to RMB 19,713.9 million, representing 55% of total assets, with a debt-to-asset ratio of 24%[48]. - Total assets as of June 30, 2024, amounted to RMB 27,961,806 thousand, a decrease from RMB 30,314,274 thousand as of December 31, 2023[134]. - The total net assets reached RMB 27,003,005,000 as of June 30, 2024, compared to RMB 26,573,257,000 at the end of December 2023[136]. - The company’s total equity increased to RMB 25,912,070 thousand as of June 30, 2024, up from RMB 24,156,467 thousand at the beginning of the year, reflecting a growth of about 7%[139]. Shareholder Information and Incentive Plans - As of June 30, 2024, the company’s issued share capital was 1,339,184,157 shares, with Lei Jun holding a total of 308,157,048 shares, representing 23.01% of the issued share capital[60]. - The 2024 Share Option Plan was approved on May 23, 2024, allowing for the issuance of up to 133,916,711 shares, which is 10% of the issued shares as of that date[68]. - The company aims to attract and retain talent through the implementation of the 2021 Share Option Plan and the Share Award Scheme[74][79]. - The total number of unexercised share options under the 2021 Share Option Plan as of June 30, 2024, is 5,500,000, with an exercise price of HKD 31.69 per share[76]. Cash Flow and Financial Activities - Operating cash flow for the six months ended June 30, 2024, was RMB 1,374,262 thousand, down from RMB 2,307,572 thousand in the same period last year, indicating a decline of about 40%[141]. - The company experienced a significant increase in cash outflows for investment activities, totaling RMB 6,787,751 thousand, compared to RMB 1,482,629 thousand in the previous year, representing an increase of approximately 358%[143]. - The net cash flow from financing activities was a negative RMB 869,442 thousand, contrasting with a positive cash flow of RMB 989,023 thousand in the same period last year[146]. Dividend and Share Repurchase - The company declared a final dividend of RMB 170,337,000 for the year ended December 31, 2023[138]. - The company repurchased a total of 18,688,600 shares at a total cost of approximately HKD 385.62 million during the six months ended June 30, 2024[113]. - The company paid dividends to equity holders of the parent amounting to RMB 170,337 thousand, slightly increasing from RMB 162,831 thousand in the previous year[146].

Investment Rating - The report maintains a **Buy** rating for Kingsoft Corporation (3888 HK) with a target price of HKD 30.00, representing a potential upside of **46.0%** from the current closing price of HKD 20.55 [1] Core Views - Kingsoft's Q2 2024 revenue increased by **13% YoY** to RMB 2.47 billion, with adjusted operating profit up **14% YoY** to RMB 880 million, driven by better-than-expected gaming performance [1] - Gaming revenue grew **20% YoY**, while WPS revenue growth slowed to **6% YoY** due to the transition of B2B business to SaaS model [1] - The launch of **JX3: Infinite** mobile game in June 2024 achieved over **11 million daily active users**, with **62% being returning players**, expected to drive significant revenue growth in Q3 2024 [1] - WPS upgraded its AI strategy with the release of **WPS AI 2.0** in July 2024, enhancing user experience and stickiness for both individual and enterprise customers [1] Financial Performance Summary - Q2 2024 revenue breakdown: Gaming contributed RMB 1.286 billion (+20% YoY), while WPS contributed RMB 1.188 billion (+6% YoY) [5] - Adjusted operating profit margin improved to **35%** in Q2 2024, up from 32% in Q1 2024 [5] - WPS's contract liabilities increased by **24% YoY**, indicating a solid foundation for long-term growth despite the short-term slowdown in revenue growth [1] Business Segment Analysis - WPS revenue growth slowed to **6% YoY** in Q2 2024, compared to **17% YoY** in Q1 2024, due to the SaaS transition [1] - WPS subscription revenue breakdown: Personal subscriptions grew **20% YoY**, while institutional licensing and subscriptions declined by **2%** and **27% YoY**, respectively [1] - Gaming revenue growth was driven by mobile games, partially offset by a decline in **JX3** PC game revenue due to a high base in the previous year [1] Future Outlook - The report expects gaming revenue to accelerate in Q3 2024, driven by the strong performance of **JX3: Infinite** and the upcoming expansion pack in October 2024 [1] - Full-year gaming revenue is expected to achieve **double-digit growth**, supported by the strong performance of mobile games [1] - WPS's AI upgrades and SaaS transition are expected to enhance long-term growth prospects, despite short-term revenue headwinds [1] Financial Forecasts - 2024E revenue forecast adjusted to RMB 9.668 billion, a **2% decrease** from the previous forecast of RMB 9.882 billion [4] - 2025E revenue forecast adjusted to RMB 10.586 billion, a **6% decrease** from the previous forecast of RMB 11.304 billion [4] - Adjusted operating profit margin is expected to improve to **35%** in 2025E, up from **31%** in the previous forecast [4]

Investment Rating - The report assigns a "Buy" rating to Kingsoft Corporation (3888) with a target price of HKD 28, indicating a potential upside of 30.5% from the current price [1][2]. Core Insights - Kingsoft's revenue for the first half of 2024 reached RMB 4.61 billion, representing an 11% year-on-year growth. The office software and services segment contributed RMB 2.41 billion, also up 11%, driven by growth in personal office subscriptions, despite a decline in institutional licensing [1]. - The gaming segment generated RMB 2.2 billion, a 10% increase, attributed to successful game content innovations, particularly for "Jian Wang 3" and "Chen Bai Jin Qu" [1]. - The company reported a significant increase in net profit attributable to shareholders, reaching RMB 680 million, a 171.7% year-on-year growth [1]. - Kingsoft Office is enhancing its AI collaboration strategy, with a focus on the WPS 365 platform aimed at organizational clients, integrating upgraded versions of WPS Office and AI solutions [1]. - The gaming business is adopting a premium strategy, with the mobile version of "Jian Wang 3" launched in June 2024, achieving a monthly active user count of 11.46 million in its first month [1]. Financial Summary - For the fiscal year ending December 31, 2024, total revenue is projected to be RMB 9.65 billion, reflecting a 13% increase from 2023 [3]. - The net profit for 2024 is forecasted at RMB 1.17 billion, indicating a 142.8% growth compared to 2023 [3]. - The report anticipates continued growth in profits for 2025 and 2026, with projections of RMB 1.5 billion and RMB 1.8 billion, respectively [3][4]. Key Financial Metrics - The gross margin for the first half of 2024 was 82%, slightly down from the previous year [1]. - The company had cash and cash equivalents of RMB 19.7 billion as of June 2024, with a net operating cash inflow of RMB 1.37 billion for the first half [1]. - The diluted earnings per share for 2024 is expected to be RMB 0.86, with a projected price-to-earnings ratio of 24.9 based on the target price [3].

Investment Rating - The report maintains a "Buy" rating for Kingsoft Corporation (03888.HK) [1] Core Views - Kingsoft Corporation's Q2 2024 performance exceeded expectations with total revenue of 2.474 billion yuan, a year-on-year increase of 12.78% and a quarter-on-quarter increase of 15.77%. The net profit attributable to shareholders reached 393 million yuan, showing a significant year-on-year increase of 587.84% and a quarter-on-quarter increase of 38.23% [2][3] Summary by Sections Gaming Business - The gaming segment achieved revenue of 1.286 billion yuan in Q2 2024, reflecting a year-on-year growth of 19.89% and a quarter-on-quarter growth of 41.09%. The increase is primarily driven by the performance of games like "Dust White Zone" and "Jian Wang 3: Wujie," leading to an upward revision of the annual revenue guidance from a 10% year-on-year increase to over 20% [3][4] Office Business - The office segment generated revenue of 1.188 billion yuan in Q2 2024, with a year-on-year increase of 5.97% but a quarter-on-quarter decline of 3.07%. The growth in personal office subscriptions continues, with a total of 38.15 million paid users, up 15% year-on-year. The company has also upgraded its AI strategy, launching WPS AI 2.0, which includes new AI office assistants for personal and enterprise users [3][4] Financial Forecast and Valuation - The report has revised the EPS forecasts for 2024-2026 to 0.99, 1.13, and 1.40 yuan respectively, reflecting an increase from previous estimates. The corresponding P/E ratios at the current stock price are projected to be 19, 16, and 13 times [4][9]

Investment Rating - The investment rating for the company is "Buy" (maintained) [2][4]. Core Views - The gaming sector is entering a product upcycle, and the WPS B-end subscription is expected to return to growth, driving overall revenue recovery. The net profit forecasts for 2024-2026 have been raised to 1.228 billion, 1.412 billion, and 1.802 billion respectively, with year-on-year growth rates of 153.9%, 15.0%, and 27.6% [4][5]. - The company's Q2 2024 revenue reached 2.474 billion, a year-on-year increase of 12.8%, aligning with Bloomberg consensus expectations. The gaming business saw a significant recovery, with a year-on-year growth rate of 19.9% in Q2 2024, driven by the launch of "Jian Wang 3: Wujie" and contributions from "Chen Bai Jin Qu" [4][5]. - The B-end revenue decline in Q2 2024 led to a slowdown in WPS growth, but the B-end subscription business is expected to return to growth. The personal subscription revenue grew by 19.8%, while institutional subscription revenue declined by 2% due to a shift from annual to monthly payment models [4][5]. Financial Summary and Valuation Metrics - Revenue (in million) for 2024E is projected at 9,751, with a year-on-year growth of 14.3%. Net profit for 2024E is expected to be 1,228 million, reflecting a significant turnaround from a loss of 6,048 million in 2022 [5]. - The gross margin is projected to be 82.6% in 2024E, with a net margin of 12.6%. The return on equity (ROE) is expected to reach 6.22% in 2024E [5]. - The diluted EPS for 2024E is forecasted at 0.92, with corresponding P/E ratios of 20.9, 18.1, and 14.2 for 2024-2026 [5].

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告之內容概不負責，對其準確性或完整性亦不發表 任何聲明，並明確表示，概不對因本公告全部或任何部分內容而產生或因依賴該等內容而引致之任何損失承擔任 何責任。 Kingsoft Corporation Limited 金山軟件有限公司 （於開曼群島持續經營的有限公司） （股份代號：03888） （可換股債券代號：40210） 截至二零二四年六月三十日止三個月及六個月 業績公告 金山軟件有限公司（「本公司」）董事（「董事」）會（「董事會」）公佈本公司及其附屬公司（「本 集團」或「金山」）截至二零二四年六月三十日止三個月及六個月之未經審計業績。該等 中期業績已由本公司審核委員會（「審核委員會」）審閱。 1 財務資料 簡明合併損益表 截至二零二四年六月三十日止三個月及六個月 | | | 截至六月三十日止三個月 | | 截至六月三十日止六個月 | | | --- | --- | --- | --- | --- | --- | | | | 二零二四年 | 二零二三年 | 二零二四年 | 二零二三年 | | | | 人民幣千元 | 人民幣千元 | 人民幣千元 | 人民幣千 ...

Investment Rating - The report maintains a "Buy" rating for the company [3][4]. Core Insights - The company achieved a revenue of 2.137 billion RMB in Q1 2024, representing an 8% year-on-year increase, while operating profit rose by 31% to 602 million RMB, leading to a net profit of 285 million RMB, a 48% increase year-on-year [2]. - The commercialization of WPS AI has begun, with the number of active devices exceeding 600 million. The office business generated 1.225 billion RMB in revenue, a 17% year-on-year increase, driven by a 25% increase in C-end subscription revenue [2]. - The gaming segment saw a revenue of 912 million RMB in Q1 2024, a 1% year-on-year decline, but new game launches are expected to boost revenue by 10% for the year [3]. Summary by Sections Financial Performance - Q1 2024 revenue: 2.137 billion RMB, up 8% YoY, down 7% QoQ - Operating profit: 602 million RMB, up 31% YoY, OP Margin at 28.2%, up 4.8 percentage points - Net profit: 285 million RMB, up 48% YoY [2]. Office Business - Revenue from office business: 1.225 billion RMB, up 17% YoY - C-end subscription revenue: 735 million RMB, up 25% YoY - B-end subscription revenue: 242 million RMB, up 14% YoY - B-end authorization revenue: 194 million RMB, up 6% YoY [2]. Gaming Business - Q1 2024 gaming revenue: 912 million RMB, down 1% YoY - Anticipated new game launches, including "Sword Net 3 Unlimited," expected to enhance revenue by 10% for the year [3]. - The game "Dust White Zone" has shown significant growth in user engagement and revenue since its launch [3]. Profit Forecast and Valuation - Projected net profits for 2024-2026: 1.051 billion RMB, 1.695 billion RMB, and 2.307 billion RMB respectively - Revenue projections for 2024-2026: 9.927 billion RMB, 11.467 billion RMB, and 13.213 billion RMB respectively [4][7].

2024 年 05 月 25 日 公司研究 评级：买入 (维持 ) 研究所： [Table_Title] 《剑网 》全平台版上线在即， 稳步开 3 WPS AI 证券分析师： 陈梦竹 S0350521090003 chenmz@ghzq.com.cn 证券分析师： 尹芮 S0350522110001 启商业化 yinr@ghzq.com.cn ——金山软件（ ） 财报点评 3888.HK 2024Q1 最近一年走势 事件 : 5月22日，公司公告2024Q1季报，实现营收21.37亿元（YoY+8.5%， QoQ-7.5%），营业利润6.02亿元，净利润5.22亿元，归母净利润2.85 亿元。 我们的观点：  1、主要财务指标分析：2024Q1 实现营业收入 21.37 亿元 （YoY+8.5%，QoQ-7.5%），其中办公软件及服务业务12.25亿元 相对恒生指数表现 2024/05/24 （YoY+16.5%，QoQ-4.7%），网络游戏及其他业务 9.12 亿元 表现 1M 3M 12M （YoY-0.8%，QoQ-11.0%）。毛利润 17.41 亿元（YoY+7.1%， 金山软件 -0.6% 17 ...

Investment Rating - The investment rating for Kingsoft Corporation (03888.HK) is "Buy" (maintained) [2][5]. Core Insights - The gaming business is expected to see a rebound in growth in Q2 2024, and the progress of WPS AI commercialization is favorable for platform valuation enhancement. The net profit forecasts for 2024-2026 have been raised to 923 million, 1.166 billion, and 1.583 billion RMB respectively, reflecting year-on-year growth rates of 91.0%, 26.3%, and 35.8% [5][6]. - The company's Q1 2024 revenue increased by 8.5% year-on-year, with gaming revenue experiencing a slight decline of 0.8% year-on-year due to a lack of major updates for "Jian Wang 3" [6][7]. - The WPS office business showed steady growth in Q1 2024, with a 16.5% year-on-year increase, driven by a 24.0% rise in individual customer subscription revenue [7]. Financial Summary and Valuation Metrics - The projected operating revenue for 2024 is 9.652 billion RMB, with a year-on-year growth of 13.1%. The net profit for 2024 is expected to be 923 million RMB, representing a significant recovery from a loss of 6.048 billion RMB in 2022 [8]. - The gross margin is projected to improve to 83.7% in 2024, while the net margin is expected to reach 9.6% [8]. - The diluted EPS for 2024 is forecasted at 0.7 RMB, with corresponding P/E ratios of 34.3, 27.2, and 20.0 for 2024, 2025, and 2026 respectively [8].