KINGSOFT(03888) 开源证券·2024-08-22 16:07Investment 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].