Kingsoft Office(SH:688111) Guohai Securities·2024-03-23 16:00Investment Rating - Buy (Maintained) [1] Core Views - The company's revenue in 2023 was 4.556 billion yuan, a year-on-year increase of 17.27%, with net profit attributable to the parent company reaching 1.318 billion yuan, up 17.92% year-on-year [2] - Subscription business grew rapidly, with personal subscription revenue at 2.653 billion yuan (+29.42% YoY) and institutional subscription revenue at 957 million yuan (+38.36% YoY) [2] - Non-GAAP net profit attributable to the parent company increased by 34.45% year-on-year, with gross margin at 85.3% (+0.3pct YoY) and net margin at 28.85% (-0.26pct YoY) [3] - WPS AI is expected to establish a paid model in Q1 2024 and achieve full commercialization in 2024, opening up long-term monetization potential [7] Business Performance - In 2023, the company's monthly active devices reached 598 million, a year-on-year increase of 4.36%, with WPS Office PC version at 265 million (+9.50% YoY) and mobile version at 330 million (+0.61% YoY) [4] - The number of annual paying individual users reached 35.49 million, a year-on-year increase of 18.43% [4] - In Q4 2023, revenue was 1.286 billion yuan (+17.99% YoY), with net profit attributable to the parent company at 424 million yuan (+39.44% YoY) [4] - The company's WPS 365 serves over 17,000 major government and enterprise clients, with public cloud service revenue growing rapidly and the number of paying enterprises increasing by 83% year-on-year [4] C-end and B-end Strategies - The company launched a new WPS Super Membership in April 2023, offering basic (148 yuan/year) and Pro (248 yuan/year) packages, aiming to enhance user conversion and average revenue per user (ARPU) [5] - In the B-end market, the company is actively promoting new licensing models in the financial and energy sectors, leveraging the demand for domestic substitution in the industry [4] Financial Forecasts - Revenue is expected to grow to 5.798 billion yuan in 2024 (+27% YoY), 7.529 billion yuan in 2025 (+30% YoY), and 9.908 billion yuan in 2026 (+32% YoY) [8] - Net profit attributable to the parent company is forecasted to reach 1.685 billion yuan in 2024 (+28% YoY), 2.270 billion yuan in 2025 (+35% YoY), and 3.090 billion yuan in 2026 (+36% YoY) [8] - EPS is projected to be 3.65 yuan in 2024, 4.92 yuan in 2025, and 6.69 yuan in 2026, with P/E ratios of 90.35X, 67.08X, and 49.28X respectively [7][8] Market Data - Current stock price: 329.74 yuan [3] - 52-week price range: 198.50-530.50 yuan [3] - Total market capitalization: 152.28 billion yuan [3] - Average daily trading volume: 1.5828 billion yuan [3]