Foxit Software(SH:688095) Tianfeng Securities·2024-06-27 13:00Investment Rating - The report assigns a "Buy" rating to the company, with a target price of 79.03 CNY based on a projected revenue of 7.23 billion CNY for 2024, applying a conservative 10x P/S ratio [18][19]. Core Insights - The company has been focusing on a dual transformation strategy prioritizing subscriptions and channels since July 2022, leading to significant growth in subscription revenue, which increased from 21% in Q4 2022 to 44% in Q1 2024 [2][18]. - The company's Annual Recurring Revenue (ARR) doubled from less than 140 million CNY to over 280 million CNY within six quarters, maintaining a subscription renewal rate above 90% [2][18]. - The company has also expanded its channel partnerships, notably with DELL, resulting in channel revenue growth from 48.16 million CNY in Q4 2022 to 63.19 million CNY in Q1 2024, which now accounts for 37% of total revenue [2][18]. Financial Data and Valuation - The company's projected revenues for 2024, 2025, and 2026 are 7.23 billion CNY, 8.46 billion CNY, and 10.11 billion CNY, respectively, with net profits expected to be -469.9 million CNY, -12 million CNY, and 534.3 million CNY [4][18]. - The company reported a revenue of 610.76 million CNY in 2023, with a growth rate of 5.33% compared to 2022 [4]. - The company's P/E ratio is projected to be 93.70 for 2024, while the P/B ratio is expected to be 1.74 [4][18]. Market Position and Competitive Landscape - The global PDF market is expanding, with Adobe holding the largest market share. The company is positioned to gain market share due to its competitive pricing and comprehensive product offerings [3][17]. - The company has introduced AI features in its products, which are expected to drive new growth opportunities, similar to Adobe's strategy [3][17]. - The report highlights the potential for the company to leverage AI and partnerships with major tech firms like Huawei to enhance its product offerings and market reach [2][17].