Kingsoft Office(SH:688111) Zhongyuan Securities·2025-04-14 10:23Investment Rating - The report maintains an "Add" investment rating for the company, indicating a projected relative increase of 5% to 15% compared to the CSI 300 index over the next six months [1][44]. Core Views - The company reported a revenue of 5.121 billion yuan for 2024, representing a year-on-year growth of 12.40%. The net profit attributable to shareholders was 1.645 billion yuan, up 24.84% year-on-year, with a basic earnings per share of 3.56 yuan [6][11]. - The company is transitioning its business disclosure from a commercial model classification to a product business classification, focusing on the development of WPS personal and WPS 365 businesses [8]. - The AI application is expected to accelerate in 2025, with significant growth in user engagement and product capabilities anticipated [9]. Financial Performance - The company achieved a gross margin of 85.14% and a diluted return on equity of 14.49% as of December 31, 2024 [2]. - The total market capitalization is approximately 142.5 billion yuan, with a price-to-earnings ratio of 86.62 for 2024 [1][11]. - The company’s revenue is projected to grow to 6.116 billion yuan in 2025, with a net profit of 1.983 billion yuan, reflecting a growth rate of 20.55% [11]. Business Segments - The WPS personal business generated 3.283 billion yuan in revenue, growing 18% year-on-year, while WPS 365, launched in 2023, saw a revenue increase of 149.33% to 437 million yuan in 2024 [8]. - The domestic personal service subscription business generated 3.1 billion yuan, up 16.84% year-on-year, while the domestic institutional subscription and service business reached 1.064 billion yuan, growing 11.11% [8]. - The company’s international and other business revenue was 250 million yuan, with a notable 38.38% growth in overseas business [11]. Future Outlook - The company plans to enhance its overseas business, which is expected to become a significant growth driver, with a projected revenue of 2.18 billion yuan in 2024, up 38.38% [11]. - The report anticipates that the company will continue to expand its AI capabilities, which are expected to drive user engagement and revenue growth [9][11].