Kingsoft Office(SH:688111) Guoxin Securities·2025-03-21 15:23Investment Rating - The investment rating for the company is "Outperform the Market" [5][14]. Core Views - The company experienced a revenue acceleration in Q4 2024, with total revenue reaching 5.121 billion yuan, a year-on-year increase of 12.4%, and a net profit attributable to shareholders of 1.645 billion yuan, up 24.84% [1][7]. - The company is increasing its investment in AI research and development, with a research expense ratio of 33.11%, up 0.79 percentage points year-on-year, while controlling sales and management expenses effectively [1][11]. - The WPS 365 business is growing rapidly, with revenue of 437 million yuan, a staggering increase of 149.33%, driven by cloud and AI services [2][3]. Summary by Sections Financial Performance - In Q4 2024, the company reported revenue of 1.494 billion yuan, a 16.21% increase, and a net profit of 605 million yuan, up 42.58% [1][7]. - The total revenue for 2024 was 5.121 billion yuan, with a net profit of 1.645 billion yuan, reflecting strong growth in profitability [1][7]. - The company’s gross margin remained stable at 85.14%, with a net margin improvement due to high profit growth [11]. User Growth and Contracts - By the end of 2024, the company had 417 million annual paid users in China, a 17.49% increase, and 6.32 billion monthly active devices globally, up 6.22% [3][4]. - The company’s contract liabilities grew to 2.136 billion yuan, a 12.90% increase, indicating effective long-term membership growth strategies [3][4]. Future Projections - The company adjusted its profit forecast for 2025-2027, expecting net profits of 1.896 billion, 2.316 billion, and 2.841 billion yuan, with year-on-year growth rates of 15%, 22%, and 23% respectively [14][16]. - The diluted EPS is projected to be 4.10, 5.01, and 6.14 yuan for 2025, 2026, and 2027, respectively, with corresponding PE ratios of 79, 65, and 53 times [14][16].