Kingsoft Office(SH:688111) Guoyuan Securities·2024-03-21 16:00Investment Rating - The report maintains a "Buy" rating for Kingsoft Office (688111 SH) [5] Core Views - Kingsoft Office achieved rapid growth in subscription business with significant revenue contribution [2] - The company's WPS AI has entered public testing phase and shows promising commercialization potential [4] - Kingsoft Office maintains strong R&D investment, particularly in AI development [4] Financial Performance - 2023 revenue reached 4 556 billion yuan, up 17 27% YoY [2] - Net profit attributable to parent company reached 1 318 billion yuan, up 17 92% YoY [2] - Adjusted net profit grew 34 45% YoY to 1 262 billion yuan [2] Business Segments - Domestic personal office service subscription revenue grew 29 42% to 2 653 billion yuan [2] - Domestic institutional subscription and service revenue increased 38 36% to 957 million yuan [2] - Domestic institutional licensing revenue decreased 21 60% to 655 million yuan [2] - Internet advertising and other business revenue declined 6 05% to 288 million yuan [2][3] User Metrics - Monthly active devices reached 598 million, up 4 36% YoY [3] - WPS Office PC version MAU grew 9 50% to 265 million [3] - WPS Office mobile version MAU increased 0 61% to 330 million [3] - Annual paying individual users reached 35 49 million, up 18 43% YoY [3] R&D and AI Development - 2023 R&D investment reached 1 472 billion yuan, accounting for 32% of revenue [4] - WPS AI focuses on three strategic directions: AIGC, Copilot, and Insight [4] - The company has accumulated full-chain experience from data production to model application [4] Future Projections - 2024-2026 revenue forecast: 5 582 billion, 7 180 billion, and 9 077 billion yuan [5] - 2024-2026 net profit forecast: 1 666 billion, 2 193 billion, and 2 776 billion yuan [5] - 2024-2026 EPS forecast: 3 61, 4 75, and 6 01 yuan per share [5] Market Valuation - Current PE ratio: 92 14x (2024E), 69 97x (2025E), 55 29x (2026E) [5] - Target price: 332 32 yuan [5]