Kingsoft Office(688111) 华泰证券·2025-04-24 02:19Investment Rating - The report maintains a "Buy" rating for the company with a target price of 400.43 RMB [8][9]. Core Insights - The company achieved a revenue of 1.301 billion RMB in Q1 2025, representing a year-over-year growth of 6.22%, and a net profit of 403 million RMB, up 9.75% year-over-year. The growth is attributed to the continuous expansion of WPS personal and WPS 365 businesses, with profit improvement driven by optimized gross margin levels [1]. - The report highlights the potential acceleration of AI commercialization due to product positioning advantages and AI feature upgrades, leading to sustained improvement in profitability [1]. - The WPS personal business generated 857 million RMB in revenue in Q1 2025, reflecting a year-over-year increase of 10.86%, primarily due to growth in user base and paid users. The global monthly active devices for WPS Office reached 647 million, up 7.92% year-over-year [2]. - WPS 365 business revenue reached 151 million RMB in Q1 2025, marking a significant year-over-year growth of 62.59%, driven by increased coverage of private enterprises and local state-owned enterprises [3]. - The overall gross margin for the company in Q1 2025 was 85.96%, an increase of 1.16 percentage points year-over-year, benefiting from a higher proportion of standardized high-margin products [4]. - The report slightly adjusts revenue forecasts for 2025-2027 to 6.176 billion, 7.568 billion, and 9.458 billion RMB respectively, while slightly increasing profit forecasts with expected EPS of 4.09, 5.09, and 6.86 RMB for the same years [5]. Summary by Sections Financial Performance - In Q1 2025, the company reported a revenue of 1.301 billion RMB and a net profit of 403 million RMB, with year-over-year growth rates of 6.22% and 9.75% respectively [1]. - The gross margin improved to 85.96%, reflecting a strategic shift towards higher-margin products [4]. Business Segments - WPS personal business revenue was 857 million RMB in Q1 2025, up 10.86% year-over-year, driven by user growth [2]. - WPS 365 business revenue surged to 151 million RMB, a 62.59% increase year-over-year, supported by expanding enterprise coverage [3]. Profitability and Valuation - The report projects EPS for 2025-2027 at 4.09, 5.09, and 6.86 RMB, with a target price of 400.43 RMB based on a 30x PS valuation [5][8].