Kingsoft Office(SH:688111) Haitong Securities·2024-10-30 09:54Investment Rating - The investment rating for the company is "Outperform the Market" and is maintained [1] Core Views - The company reported steady performance with significant growth in operating cash flow, reflecting the advantages of its subscription-based business model for both C-end and B-end services [4] - The C-end business showed a steady increase in monthly active users, driven by the WPS AI features, enhancing user engagement and conversion rates [5] - The B-end business is experiencing an upgrade in revenue models, with a recovery in the Xinchuang (信创) business, contributing to long-term healthy development [6] - The company is expected to see revenue growth in personal subscription services and institutional subscription services, with projected revenue growth rates of 21%/24%/26% and 5%/15%/18% respectively from 2024 to 2026 [6][8] Financial Performance Summary - For Q3 2024, the company reported revenue of 1.214 billion yuan, a year-on-year increase of 10.53%, and a net profit of 318 million yuan, up 8.33% year-on-year [4] - The operating cash flow net amount reached 451 million yuan, reflecting a year-on-year growth of 31.2% [4] - The gross profit margin stood at 85.47%, an increase of 0.66 percentage points year-on-year [4] - Revenue projections for 2024-2026 are 5.107 billion yuan, 6.143 billion yuan, and 7.551 billion yuan, with year-on-year growth rates of 12.1%, 20.3%, and 22.9% respectively [8][11] Business Segment Analysis - C-end: Revenue from domestic personal office service subscriptions reached 762 million yuan in Q3 2024, a year-on-year increase of 17.24% [5] - B-end: Revenue from domestic institutional subscription and service business was 248 million yuan, showing a slight increase of 0.02% year-on-year [6] - The institutional authorization business is expected to see revenue growth rates of -3%/12%/15% from 2024 to 2026, while international and other businesses are projected to grow at -12%/15%/20% during the same period [8] Valuation and Price Target - The company is assigned a dynamic PE of 75-80 times for 2025, with a reasonable value range of 305.25-325.60 yuan [8]