Kingsoft Office(SH:688111) Soochow Securities·2024-03-20 16:00Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The report highlights that AI is expected to drive a long-term revaluation of the company's growth potential, with optimistic projections for revenue and profit growth in the coming years [9] Financial Performance Summary - Total revenue for 2023 was 45.56 billion yuan, representing a year-on-year increase of 17.27% [2] - Net profit attributable to shareholders for 2023 was 13.18 billion yuan, with a year-on-year growth of 17.92% [2] - Subscription revenue reached 36.1 billion yuan in 2023, accounting for 79.24% of total revenue, with a year-on-year increase of 31.66% [2] - The company's Q4 2023 revenue was 12.84 billion yuan, showing a year-on-year increase of 17.9% [2] C-end Subscription Insights - C-end subscription revenue for 2023 was 26.53 billion yuan, up 29.42% year-on-year, with Q4 revenue reaching a historical high of 7.51 billion yuan [3] - The number of paid users increased to 35.49 million, reflecting an 18.41% year-on-year growth [3] - The company is undergoing a membership system transformation, which is expected to enhance user retention and revenue per user (ARPU) [3] B-end Subscription Insights - B-end subscription revenue grew to 9.57 billion yuan in 2023, marking a 38.36% year-on-year increase, with Q4 revenue at 2.9 billion yuan [3] - The company has successfully served over 17,000 government and enterprise clients with its WPS 365 service [3] Future Outlook - The report anticipates that the new membership system, AI applications, and the recovery of the domestic market will contribute to upward trends in revenue and profit margins starting in 2024 [9] - Revenue forecasts for 2024, 2025, and 2026 are set at 57.11 billion yuan, 77.45 billion yuan, and 101.7 billion yuan respectively [9] - Net profit forecasts for the same years are 17.00 billion yuan, 24.38 billion yuan, and 32.1 billion yuan respectively [9]