Foxit Software(688095) 东兴证券·2024-09-06 00:00Investment Rating - The report gives a "Strong Buy" rating for Foxit Software [2][7]. Core Views - The PDF industry has a vast potential market size, estimated at approximately $32 billion in 2024, with only a few companies mastering the complete core technologies [2][47]. - Foxit Software is positioned as a leading company in the PDF sector, with a strong focus on productization and global competitiveness, achieving nearly 90% of its revenue from overseas [2][3]. - The company's subscription business is growing, with an annual recurring revenue (ARR) of 325 million yuan as of mid-2024, reflecting a 30% increase from the end of 2023 [2][3][64]. Summary by Sections PDF Industry - The PDF format is widely used across various fields due to its consistency and efficiency in document representation [2][15]. - The industry is dominated by a few key players, with Adobe being the leader, while Foxit holds a strong position among secondary competitors [2][47]. Company Overview - Foxit Software specializes in PDF-related products and services, including PDF editors, development platforms, and enterprise solutions [4][27]. - The company has a complete product matrix and has been recognized as one of the "2024 Best Software Companies" by G2, being the only PDF vendor besides Adobe to make the top 100 list [2][3][54]. Financial Performance - The company reported revenues of 610.76 million yuan in 2023, with a growth rate of 5.33% [8]. - The gross margin remains high at around 95%, indicating strong profitability potential despite current losses [42][44]. Growth Logic - The core growth logic for Foxit Software is the potential to capture market share from Adobe, with a focus on B2B clients and a strategy to leverage competitive pricing [3][52]. - The transition to a subscription model is expected to enhance revenue stability and customer retention, with a current subscription revenue growth of 68% year-on-year [64][71]. AI and Cloud Computing - The integration of AI technologies is anticipated to enhance product offerings and customer engagement, providing a competitive edge in the market [64][66]. - Foxit is actively investing in AI capabilities to improve document processing efficiency and user experience [66][67].