Kingsoft Office(688111) CAITONG SECURITIES·2024-10-27 10:23Investment Rating - The investment rating for the company is "Accumulate" (maintained) [1] Core Views - The company has shown steady growth in performance, with a revenue of 3.627 billion yuan for the first three quarters of 2024, representing a year-on-year increase of 10.90%. The net profit attributable to shareholders reached 1.04 billion yuan, up 16.41% year-on-year [2] - The personal subscription business continues to grow, achieving a revenue of 2.292 billion yuan in the first three quarters of 2024, a year-on-year increase of 20.48%. The introduction of new AI features has enhanced user engagement and conversion rates [2] - The company has reached 200 million overseas users with WPS AI, and the revenue from domestic institutional subscriptions was 691 million yuan, a year-on-year increase of 3.74% [2] Financial Performance Summary - For 2024, the company is projected to achieve revenues of 5.874 billion yuan, with net profits of 1.644 billion yuan, reflecting a PE ratio of 74 [3] - Revenue growth rates are expected to be 28.94% in 2024, 29.92% in 2025, and 28.71% in 2026 [4] - The company’s net profit is forecasted to grow at rates of 24.74% in 2024, 27.66% in 2025, and 27.47% in 2026 [4] User Engagement and Market Expansion - The active device count for the company's main products reached 618 million, a year-on-year increase of 4.92%, with the WPS Office PC version seeing a monthly active device count of 277 million, up 6.95% [2] - The company is focusing on expanding its presence in the public cloud market, targeting large and medium-sized enterprises, which is expected to enhance customer coverage and value [2] Future Outlook - The company is expected to benefit significantly from the digitalization and localization of office software in China, with a strong internal growth momentum driven by AI enhancements [3] - The projected revenues for 2024-2026 are 5.874 billion yuan, 7.632 billion yuan, and 9.823 billion yuan respectively, with net profits of 1.644 billion yuan, 2.098 billion yuan, and 2.675 billion yuan [3]