KINGSOFT(03888) 开源证券·2024-11-20 14:51Investment Rating - Buy (Maintained) [2] Core Views - The company's gaming revenue has consistently exceeded expectations, and the WPS B-end business is showing signs of recovery [6] - The company's 2024Q3 revenue was 2.915 billion yuan, a year-on-year increase of 41.5%, with net profit attributable to the parent company reaching 413 million yuan, significantly surpassing expectations [6] - The gaming business, driven by "JX3," saw a year-on-year increase of 77.7% to 1.71 billion yuan in 2024Q3 [6] - WPS B-end business is expected to recover, with institutional subscription revenue stabilizing and showing a 23.8% quarter-on-quarter increase [6] - The company's 2024-2026 net profit forecasts have been revised upward to 1.796/2.052/2.450 billion yuan, with year-on-year growth rates of 271.5%/14.3%/19.4% respectively [6] Financial Performance - 2024Q3 revenue: 2.915 billion yuan, up 41.5% YoY [6] - 2024Q3 net profit: 413 million yuan, compared to 28.49 million yuan in the same period last year [6] - Gaming revenue in 2024Q3: 1.71 billion yuan, up 77.7% YoY [6] - WPS B-end subscription revenue: Stabilized with a 23.8% quarter-on-quarter increase [6] - 2024-2026 net profit forecasts: 1.796/2.052/2.450 billion yuan, with YoY growth rates of 271.5%/14.3%/19.4% [6] Gaming Business - "JX3" drove a 77.7% YoY increase in gaming revenue to 1.71 billion yuan in 2024Q3 [6] - "JX3 Wujie" achieved full-platform data inheritance and interoperability, with 11.46 million monthly active users in its first month of public testing [6] - New expansion for "JX3" was released in late October 2024, expected to drive continued rapid growth in Q4 [6] - "Jie Xian Ji" began public testing in August 2024, with over 3 million global pre-registrations and ranked 17th on Steam's wishlist [6] WPS Business - WPS B-end business showed signs of recovery, with institutional subscription revenue stabilizing and increasing 23.8% quarter-on-quarter [6] - WPS AI 2.0 enhanced user experience, improving payment stickiness and conversion rates [6] - Institutional authorization revenue increased by 9.0% YoY and 9.4% quarter-on-quarter, indicating recovery in the Xinchuang business [6] - WPS Hongmeng version began public testing in October 2024, expected to drive future growth in the B-end business [6] Valuation Metrics - 2024-2026 diluted EPS: 1.34/1.54/1.83 yuan [6] - 2024-2026 P/E ratios: 22.0/19.3/16.1x [6] - 2024-2026 P/B ratios: 1.7x [6] - 2024-2026 ROE: 9.1%/10.3%/12.3% [6]