Kingsoft Office(688111) SINOLINK SECURITIES·2024-10-27 03:40Investment Rating - The report maintains a "Buy" rating for the company [4]. Core Insights - The company reported a revenue of 3.63 billion RMB for the first three quarters of 2024, representing a year-on-year growth of 10.9%, and a net profit attributable to shareholders of 1.04 billion RMB, up 16.4% year-on-year [2]. - The company's active device count reached 620 million by Q3 2024, a 4.9% increase year-on-year, with PC and mobile active devices growing by 7.0% and 3.4% respectively [3]. - The company is focusing on AI commercialization and has introduced new features to enhance user engagement and conversion rates [3]. Financial Performance - For Q3 2024, the company achieved a revenue of 1.21 billion RMB, a 10.5% increase year-on-year, and a net profit of 320 million RMB, up 8.3% year-on-year [2]. - The gross margin for Q3 was 85.5%, an increase of 0.7 percentage points year-on-year, while the sales and management expense ratios decreased [3]. - The company forecasts revenues of 5.13 billion RMB, 5.92 billion RMB, and 6.94 billion RMB for 2024, 2025, and 2026 respectively, with corresponding net profits of 1.54 billion RMB, 1.91 billion RMB, and 2.34 billion RMB [4]. Business Segmentation - The domestic personal office service subscription business grew by 17.2% year-on-year in Q3, driven by the "Inclusive AI" strategy [3]. - The domestic institutional licensing business saw a revenue of 140 million RMB in Q3, a 9.0% year-on-year increase [3]. - International and other business revenues declined by 10.4% year-on-year, primarily due to the shutdown of advertising operations [3]. Cost and Expenses - The company’s R&D expense ratio increased to 37.4%, reflecting higher investments in AI and overseas market development [3]. - Contract liabilities increased by 16.3% year-on-year, indicating a strong order backlog [3].