Kingsoft Office(688111) Minsheng Securities·2024-10-28 01:00Investment Rating - The report maintains a "Recommended" rating for Kingsoft Office (688111.SH) with a closing price of 264.50 CNY on October 25, 2024 [5]. Core Insights - Kingsoft Office reported a total revenue of 3.627 billion CNY for the first three quarters of 2024, representing a year-on-year growth of 10.90%. The net profit attributable to shareholders reached 1.04 billion CNY, up 16.41% year-on-year [2]. - In Q3 2024, the company achieved a revenue of 1.214 billion CNY, marking a 10.53% increase year-on-year, with a net profit of 319 million CNY, reflecting an 8.33% growth [2]. - The company’s contract liabilities reached a historical high of 1.99 billion CNY, showing a quarter-on-quarter increase of 4.6% and a year-on-year increase of 16.3% [3]. Revenue Breakdown - Domestic personal office service subscription revenue was 760 million CNY, growing 17.24% year-on-year, driven by the introduction of WPS AI 2.0 features [3]. - Domestic institutional subscription and service revenue was 248 million CNY, with a slight growth of 0.02%, supported by the WPS 365 platform [3]. - Domestic institutional licensing revenue reached 143 million CNY, up 8.97% year-on-year, due to increased orders in the government and state-owned enterprise sectors [3]. - International and other business revenue was 60 million CNY, down 10.43% year-on-year, primarily due to the shutdown of domestic third-party advertising services [3]. User Engagement and Product Development - The monthly active devices for the company's main products reached 618 million, a year-on-year increase of 4.92% [3]. - The WPS Office PC version had 277 million monthly active devices, up 6.95% year-on-year, while the mobile version had 338 million, reflecting a 3.36% increase [3]. - The public beta of WPS on HarmonyOS in October 2024 is expected to enhance product penetration [3]. Financial Forecast - Revenue projections for Kingsoft Office are estimated at 5.143 billion CNY in 2024, 6.341 billion CNY in 2025, and 7.982 billion CNY in 2026, with corresponding EPS of 3.25 CNY, 4.09 CNY, and 5.18 CNY [4][6]. - The report anticipates a PE ratio of 81X for 2024, 65X for 2025, and 51X for 2026 [4].