Kingsoft Office(SH:688111) GF SECURITIES·2024-04-24 06:32Investment Rating - The report maintains a "Buy" rating for the company, with a target price of approximately 388.66 CNY per share [4][13]. Core Views - The company reported Q1 2024 revenue of 1.225 billion CNY, a year-on-year increase of 16.5%, and a net profit attributable to shareholders of 367 million CNY, up 37.3% year-on-year. The non-GAAP net profit was 352 million CNY, reflecting a 40.6% increase year-on-year [2][8]. - The commercialization of AI for the consumer segment has fully commenced, coupled with an upgrade of the membership account system, which is expected to boost both ARPU and the number of paying users. The pricing for AI features is significantly higher than non-AI features, indicating potential for substantial ARPU growth if widely accepted by customers [2][9]. - The launch of WPS 365, which integrates AI functionalities, aims to assist enterprises in building their own operational frameworks. This new offering includes WPS Office, WPS AI Enterprise Edition, and WPS Collaboration, with components like AI Hub and AI Docs. The report suggests that while this could significantly enhance institutional subscription revenue, the sales cycle for enterprise products is longer and requires patience for growth [2][10]. Financial Summary - The company forecasts revenues of 5.674 billion CNY, 7.421 billion CNY, and 10.004 billion CNY for 2024, 2025, and 2026, respectively, with year-on-year growth rates of 24.5%, 30.8%, and 34.8% [13]. - The projected net profits for the same years are 1.624 billion CNY, 2.104 billion CNY, and 2.853 billion CNY, with growth rates of 23.3%, 29.6%, and 35.6% [13]. - The report highlights that the company's EBITDA is expected to grow from 1.812 billion CNY in 2024 to 3.094 billion CNY by 2026, indicating strong operational performance [2][13].