Kingsoft Office(SH:688111) Guotou Securities·2024-08-21 13:30Investment Rating - The investment rating for the company is "Buy - A" with a target price of 247.83 CNY for the next six months [4]. Core Insights - The company reported a revenue of 2.413 billion CNY for the first half of 2024, representing a year-on-year growth of 11.09%. The net profit attributable to shareholders was 721 million CNY, up 20.38% year-on-year [2][9]. - The company is experiencing steady growth in its C-end subscription services and is making significant progress in its B-end SaaS transformation [2][3]. - The upgraded WPS AI 2.0 was launched, enhancing various functionalities such as writing, reading, data analysis, and design assistance, which is expected to drive growth in personal subscription services [3][9]. Financial Performance - For the first half of 2024, the company achieved a revenue of 2.413 billion CNY, with a net profit of 721 million CNY. In Q2 alone, the revenue was 1.188 billion CNY, showing a year-on-year increase of 5.98% [2]. - The domestic personal office service subscription revenue reached 1.530 billion CNY, growing by 22.17% year-on-year, while the institutional subscription and service revenue was 443 million CNY, up 5.95% year-on-year [2]. - The total contract liabilities amounted to 2.685 billion CNY, indicating a solid foundation for the company's long-term development [2]. Business Segments - The personal and institutional subscription revenues accounted for 82% of total revenue, an increase of 5 percentage points year-on-year [2]. - The company is transitioning its domestic institutional subscription business to a SaaS model, which is progressing smoothly [2][9]. - The international and other business revenues decreased to 115 million CNY, down 18.12% year-on-year [2]. Future Projections - The company is expected to achieve revenues of 5.211 billion CNY, 6.136 billion CNY, and 7.295 billion CNY for the years 2024, 2025, and 2026, respectively, with net profits projected at 1.556 billion CNY, 1.922 billion CNY, and 2.371 billion CNY for the same years [9][10].