Ge Long Hui·2025-07-24 11:08Core Viewpoint - Kingsoft Software continues to show steady revenue growth, with a first-quarter revenue of 2.34 billion RMB, representing a 9% year-on-year increase [1] Group 1: Financial Performance - The company's gross margin for the quarter is approximately 82%, an increase of 1 percentage point year-on-year [1] - Research and development expenses are around 830 million RMB, up 16% year-on-year, primarily due to investments in AI capabilities and new game categories [1] - Sales expenses are approximately 340 million RMB, a 30% increase year-on-year, mainly driven by promotional investments for new games [1] - Administrative expenses remain stable at about 160 million RMB year-on-year [1] - The net profit attributable to shareholders is approximately 284 million RMB, slightly down from 285 million RMB in the same period last year [1] Group 2: Business Segments - The office segment, including WPS personal and WPS 365 businesses, generates 1.301 billion RMB in revenue, a 6.22% year-on-year increase [1] - WPS personal business revenue is 857 million RMB, reflecting a 10.86% year-on-year growth, with a global monthly active user base of approximately 647 million, up 7.92% [1] - WPS 365 business revenue is 151 million RMB, showing a significant growth of 62.59% year-on-year, driven by document, collaboration, and AI capabilities [1] Group 3: Gaming Segment - The gaming and other business segment generates approximately 1.04 billion RMB in revenue, a 14% year-on-year increase, mainly from the success of the games "Dust White Zone" and "Jian Wang 3" [2] - "Dust White Zone" maintains user engagement through differentiated content and long-term operational strategies, while "Jian Wang 3" solidifies its user base through gameplay updates [2] - The new game "Limitless Machine" launched on July 2, has received positive feedback, ranking fifth on Steam's global wishlist [2] Group 4: Investment Outlook - The company is expected to see continued revenue growth driven by the dual engines of office and gaming segments [2] - Projections for revenue from 2025 to 2027 are 11.4 billion RMB, 12.9 billion RMB, and 14.6 billion RMB, with net profits of 1.88 billion RMB, 2.46 billion RMB, and 2.85 billion RMB respectively [2] - The target valuation for Kingsoft Software is approximately 49.1 billion RMB, corresponding to a target price of about 40 HKD, maintaining a "buy" rating [2]