Kingsoft Office(SH:688111) Ping An Securities·2025-08-21 09:30Investment Rating - The report maintains a "Recommended" investment rating for the company, with a current stock price of 300.99 yuan [1]. Core Views - The company has shown steady growth in the first half of 2025, with revenue reaching 2.657 billion yuan, a year-on-year increase of 10.12%, and a net profit attributable to shareholders of 747 million yuan, up 3.57% year-on-year [5][9]. - The WPS 365 business has experienced rapid growth, with a significant increase in revenue and a strong customer base expansion [9][10]. - The integration of AI capabilities is becoming increasingly evident, contributing to user engagement and product enhancement [10]. Financial Performance Summary - Revenue and Profit: In the first half of 2025, the company achieved operating revenue of 2.657 billion yuan, with a net profit of 747 million yuan and a non-GAAP net profit of 727 million yuan [5][9]. - Growth Rates: The company’s revenue growth is projected to be 15.5% in 2025, with net profit growth of 15.3% [12]. - Margins: The gross margin for the first half of 2025 was 85.03%, while the net profit margin was 28.12% [9]. - R&D Investment: The company has significantly increased its R&D investment, with R&D expenses reaching 1.696 billion yuan in 2025, accounting for 36.07% of revenue [9][10]. Business Segment Performance - WPS Personal Business: Revenue from the WPS personal business was 1.748 billion yuan, growing by 8.38% year-on-year, with a total of 41.79 million annual paying users [9][10]. - WPS 365 Business: The WPS 365 business generated 309 million yuan in revenue, marking a substantial growth of 62.27% year-on-year, with notable new clients acquired [9][10]. - AI Integration: The company launched WPS AI 3.0, enhancing its product offerings and user engagement, with AI monthly active users reaching 29.51 million [10]. Future Projections - Earnings Forecast: The company’s projected net profits for 2025-2027 are 1.897 billion yuan, 2.256 billion yuan, and 2.696 billion yuan, respectively, with corresponding EPS of 4.10, 4.87, and 5.82 yuan [10][12]. - Valuation Metrics: The projected P/E ratios for 2025-2027 are 73.5, 61.8, and 51.7 times, indicating a favorable valuation outlook [10][12].