Kingsoft Office(SH:688111) HTSC·2025-03-20 10:30Investment Rating - The report maintains a "Buy" rating for the company with a target price of RMB 404.54 [8][9]. Core Insights - The company achieved a revenue of RMB 5.121 billion in 2024, representing a year-over-year increase of 12.40%, and a net profit attributable to shareholders of RMB 1.645 billion, up 24.84% year-over-year. The Q4 revenue was RMB 1.494 billion, with a year-over-year growth of 16.21% and a net profit of RMB 605 million, reflecting a 42.58% increase year-over-year. The performance exceeded expectations due to strong growth in WPS personal and WPS 365 businesses [1][2]. - The strong growth in WPS personal and WPS 365 businesses is attributed to the effective implementation of the AI strategy, with significant product launches aimed at different customer segments [2][3]. - The company has a solid customer base, with over 632 million monthly active devices globally, including 291 million for the PC version and 341 million for the mobile version. The number of annual paid personal users in China reached 41.7 million, a 17.49% increase year-over-year [3]. - The company is increasing its R&D investment, particularly in AI product development, which is expected to accelerate product upgrades and commercialization in 2025 [4]. - Revenue projections for 2025-2027 are RMB 62.39 billion, RMB 77.05 billion, and RMB 96.78 billion, respectively, with a target price based on a 30x PS ratio for 2025 [5][7]. Summary by Sections Financial Performance - In 2024, the company reported a revenue of RMB 5.121 billion and a net profit of RMB 1.645 billion, with significant growth in Q4 [1][2]. - The revenue breakdown for 2024 includes RMB 3.283 billion from WPS personal business, RMB 437 million from WPS 365 business, RMB 1.268 billion from WPS software business, and RMB 132 million from other businesses [2]. User Engagement - The company has over 632 million monthly active devices, with a notable increase in both PC and mobile users. The monthly active users of WPS AI reached 19.68 million [3]. R&D and AI Strategy - The company is focusing on enhancing its AI capabilities, with increased R&D spending expected to drive product innovation and market penetration [4]. Valuation and Projections - The target price of RMB 404.54 reflects a 30x PS ratio for 2025, indicating confidence in the company's growth trajectory and market position [5][9].