Kingsoft Office(SH:688111) Guotai Junan Securities·2024-04-25 12:32Investment Rating - The report maintains an "Accumulate" rating with a target price of 351.90 CNY, unchanged from the previous rating [1][7][9]. Core Views - The company reported a robust revenue growth of 16.54% year-on-year in Q1 2024, achieving a revenue of 1.225 billion CNY, while net profit grew by 37.31% to 367 million CNY, exceeding market expectations [7][8]. - Subscription business continues to grow, with personal subscription revenue increasing by 24.80% year-on-year, driven by enhanced member benefits and improved payment rates [7][8]. - The company is entering a pivotal year for AI applications in 2024, with the launch of WPSAI personal subscription service and the upgraded WPS365 productivity platform, which is expected to enhance user payment rates and average revenue per user [7][8]. Financial Summary - The company’s revenue is projected to grow from 4.556 billion CNY in 2023 to 6.035 billion CNY in 2024, reflecting a growth rate of 32% [8]. - The net profit is expected to increase from 1.318 billion CNY in 2023 to 1.720 billion CNY in 2024, with a growth rate of 31% [8]. - Earnings per share (EPS) are forecasted to be 3.72 CNY in 2024, up from 2.85 CNY in 2023 [8]. Market Data - The stock has a market capitalization of 140.716 billion CNY, with a 52-week price range of 209.86 to 517.00 CNY [2][9]. - The average daily trading volume is 4.38 million shares, with an average daily trading value of 1,204.96 million CNY [2]. Profitability and Valuation Metrics - The operating profit margin is expected to improve from 23.9% in 2023 to 29.5% in 2024 [8]. - The price-to-earnings (P/E) ratio is projected to decrease from 106.79 in 2023 to 81.83 in 2024, indicating a more attractive valuation [8]. Subscription and Licensing Business - The licensing business revenue grew by 6.31% year-on-year, supported by the recovery of procurement orders from domestic clients [7][8]. - The institutional subscription business revenue increased by 15.57% year-on-year, although the growth rate has slightly declined due to the transition phase of the WPS365 platform [7][8]. AI Integration - The acceleration of AI commercialization is anticipated to drive subscription business growth beyond expectations, with the launch of new AI features expected to enhance user engagement and revenue [7][8].