Kingsoft Office(SH:688111) Shanxi Securities·2024-08-27 03:55Investment Rating - The report assigns a "Buy-A" rating to the company, indicating an expected price increase of over 15% relative to the benchmark index within the next 6-12 months [2][5]. Core Insights - The company's personal subscription business is experiencing rapid growth, while the institutional business faces short-term pressure due to the transition to a SaaS model. The introduction of WPS AI 2.0 and a new membership system is expected to enhance user engagement and revenue [1][4]. - The company reported a revenue of 24.13 billion yuan for the first half of 2024, a year-on-year increase of 11.09%, with a net profit of 7.21 billion yuan, up 20.38% year-on-year [3][4]. - The report highlights the strong performance of the personal office service subscription business, which generated 1.53 billion yuan in revenue, a 22.17% increase year-on-year, driven by continuous upgrades in AI and collaboration product features [1][3]. Financial Performance - For the first half of 2024, the company achieved a net profit margin of 29.92%, an increase of 2.50 percentage points year-on-year, attributed to reduced promotional expenses and a decrease in the sales expense ratio to 18.32% [1]. - The company’s earnings per share (EPS) for 2024 is projected to be 3.22 yuan, with expected growth rates of 13.9%, 25.8%, and 26.7% for the years 2024, 2025, and 2026 respectively [5][6]. - The report provides a detailed financial forecast, indicating a steady increase in revenue and net profit over the next few years, with projected revenues of 51.88 billion yuan in 2024 and 65.25 billion yuan in 2025 [6][7]. Business Developments - The launch of WPS AI 2.0 includes various versions tailored for personal, enterprise, and government use, indicating a strategic push towards AI commercialization [1][4]. - The company has initiated collaborative projects with leading enterprises across various sectors, including finance and high-end manufacturing, to explore the implementation of WPS AI in office scenarios [1][4].