Kingsoft Office(SH:688111) EBSCN·2024-08-22 00:40Investment Rating - The report assigns a "Buy" rating for the company, indicating an expected investment return exceeding 15% over the next 6-12 months [8]. Core Views - The company has demonstrated steady growth in operational performance, with a 11.09% year-on-year increase in revenue to 2.413 billion yuan and a 20.38% increase in net profit to 721 million yuan for the first half of 2024 [2][3]. - The transition to a SaaS model for institutional subscriptions is progressing well, supported by a robust product ecosystem [2][3]. - Continued investment in AI and collaboration technologies is driving the commercialization of AI applications, with significant user adoption in both personal and institutional segments [3]. Summary by Sections Financial Performance - In H1 2024, the company achieved revenue of 2.413 billion yuan, up 11.09% year-on-year, and a net profit of 721 million yuan, reflecting a 20.38% increase [2]. - The personal office service subscription revenue reached 1.530 billion yuan, growing 22.17% year-on-year, while institutional subscription revenue was 443 million yuan, up 5.95% [2]. - The total subscription revenue amounted to 1.973 billion yuan, a year-on-year increase of 18.11%, accounting for 82% of total revenue [2]. Business Segments - The company reported 6.02 billion monthly active devices as of June 30, 2024, with a 3.08% year-on-year increase [2]. - The WPS AI 2.0 was launched, enhancing the AI capabilities across various applications, contributing to strong growth in personal subscription services [3]. - The institutional subscription business is transitioning to a SaaS model, with healthy growth in contract liabilities [2][3]. Research and Development - R&D investment reached 808 million yuan in H1 2024, a 12.61% increase year-on-year, with R&D expenses accounting for approximately 33% of total revenue [3]. - The workforce includes 2,991 R&D personnel, representing about 65% of total employees [3]. Profit Forecast - Revenue forecasts for 2024 and 2025 have been adjusted downwards to 5.200 billion yuan and 6.975 billion yuan, respectively, reflecting a decrease of 25.57% and 28.00% [3]. - Net profit forecasts for the same periods have also been revised down to 1.588 billion yuan and 2.159 billion yuan, with corresponding adjustments of 22.12% and 24.43% [3].