Foxit Software(SH:688095) Guohai Securities·2024-05-06 13:00Investment Rating - The report assigns an "Accumulate" rating for the company, marking its first coverage [7][8]. Core Insights - The company is undergoing a subscription transformation, which is currently putting pressure on short-term performance, but the overall business value is expected to stabilize and improve in the long term [8][12]. - The company reported a revenue growth of 5.33% year-on-year for 2023, with total revenue reaching 611 million yuan, while the net profit attributable to shareholders was a loss of 91 million yuan [11][12]. - The subscription revenue accounted for 35.36% of total revenue in 2023, with a significant increase of over 80% in the subscription revenue from the European and American markets [12][15]. Financial Performance - The company’s revenue for 2024 is projected to be 701 million yuan, with a growth rate of 15%, and the net profit is expected to improve to a loss of 35 million yuan [9][8]. - The gross margin remains high at 94.79%, although it has slightly decreased by 0.54 percentage points year-on-year [7]. - The operating cash flow for the company was negative at -38 million yuan, compared to a positive cash flow of 58 million yuan in the previous year [7][12]. Future Projections - The company anticipates revenues of 822 million yuan and 1.018 billion yuan for 2025 and 2026, respectively, with corresponding net profits projected to be 11 million yuan and 55 million yuan [9][8]. - The report highlights that the company’s annual recurring revenue (ARR) reached 250 million yuan, reflecting a year-on-year increase of 80.60% [12][15]. Market Position - The company’s market capitalization is approximately 5.53 billion yuan, with a current stock price of 60.46 yuan [7][12]. - The report notes that the company is expanding its distribution channels significantly in Europe and China, with channel revenue growth of 22.39% year-on-year [12][15].