Kingsoft Office(SH:688111) KAIYUAN SECURITIES·2024-03-23 16:00Investment Rating - The investment rating for Kingsoft Office (688111.SH) is maintained at "Buy" [2][3] Core Views - The long-term growth path for the company is clear, with a downward adjustment in the net profit forecast for 2024-2025 to 1.654 billion and 2.076 billion yuan, respectively, while a new forecast for 2026 is set at 2.750 billion yuan, corresponding to EPS of 3.58, 4.50, and 5.95 yuan per share [3] - The continuous upgrade of the WPS AI product is expected to open up new growth opportunities, supporting the "Buy" rating [3] Financial Performance - The company reported a total revenue of 4.556 billion yuan for 2023, representing a year-on-year growth of 17.27% [4] - The revenue breakdown shows that C-end subscription revenue was 2.653 billion yuan (up 29.42%), B-end subscription revenue was 957 million yuan (up 38.36%), while B-end licensing revenue decreased by 21.60% to 655 million yuan [4] - The net profit attributable to the parent company for 2023 was 1.318 billion yuan, a year-on-year increase of 17.92% [4] - The company achieved an operating cash flow of 2.058 billion yuan, up 28.36% year-on-year, primarily due to an increase in advance payments from C-end subscriptions [4] User Metrics and Growth Potential - As of December 31, 2023, the company had 598 million monthly active devices, a year-on-year increase of 4.36%, and a total of 35.49 million paid individual users, up 18.43% [5] - The average revenue per user (ARPU) for C-end business is estimated at 74.76 yuan, reflecting an increase from the end of 2022 [5] - The WPS AI product completed its filing and officially began public testing in the fourth quarter, with expectations for further monetization of personal subscription services [5] Financial Projections - The projected revenue for 2024 is 5.688 billion yuan, with a year-on-year growth of 24.8%, and for 2025, it is expected to reach 7.478 billion yuan, growing by 31.5% [6] - The projected net profit for 2024 is 1.654 billion yuan, with a growth rate of 25.5% [6] - The company's gross margin is expected to remain stable around 85.3% for the next few years [6]