\u3000\u3 Guocheng Mining Co.Ltd(000688) 111 Beijing Kingsoft Office Software Inc(688111) )
On February 25, 2022, the company released the performance express of 2021. In 2021, the company achieved an operating revenue of 3.28 billion yuan, a year-on-year increase of 45.07%; The net profit attributable to the parent company was 1.042 billion yuan, a year-on-year increase of 18.68%; The non net profit attributable to the parent company was 841 million yuan, a year-on-year increase of 37.47%.
The performance of personal subscription business was brilliant, and the growth of Xinchuang business doubled. 1) Personal subscription business: with the continuous expansion of the user base of the individual user market, the company promotes the long-term transformation of users by enriching product functions and other ways. In 2021, the operating revenue was about 1.465 billion yuan, a year-on-year increase of about 44%; 2) Government enterprise subscription business: by broadening ecological channels, improving product system and improving service experience, the company continued to promote the transformation of government enterprise users from traditional independent end office to cloud and collaborative office, and also promoted the development of the company’s b-end subscription business. In 2021, the company’s Chinese institutional subscription and service business realized an operating revenue of about 446 million yuan, a year-on-year increase of about 23%. 3) In the field of Xinchuang business, the company gave full play to its advantages in products and channels. The authorized business of Chinese institutions achieved an operating revenue of about 962 million yuan, a year-on-year increase of about 107%.
The deduction of Non Profits maintained rapid growth, and the high increase of contract liabilities laid the foundation for future growth. In 2021, the company deducted 841 million yuan of net profit not attributable to the parent company, with a year-on-year increase of 37.47%; The weighted average return on net assets reached 14.35% in 2021, an increase of 0.71 percentage points over 2021 and higher than the level in 2020. In 2020, due to the investment income from the acquisition of digital science and technology network dimension, the net profit attributable to the parent increased rapidly. We believe that deducting the net profit not attributable to the parent can better reflect the actual situation of the company’s operation.
At the same time, according to this announcement, the total contract liabilities of the company exceeded 1.6 billion yuan, with a year-on-year increase of more than 70%, which was also higher than that in the third quarter of 2021 (2021q3 contract liabilities were 1.194 billion yuan). The rapid increase of contract liabilities shows that the customer stickiness and willingness to pay of individual and institutional subscription business are increasing, and the company’s business is expected to maintain rapid growth in the future.
Transformation layout ecology, fully enabling the digital transformation of large-scale organization office. At the 2021 Jinshan digital office conference, the company released a series of new products, including Jinshan collaboration, light dimension table, Jinshan knowledge base, etc., forming a comprehensive organizational office capacity matrix, covering the whole life cycle of digital office, helping large organizations quickly complete group digitization and realize unified security control. At the same time, Jinshan digital office platform was also released to help large and super large organizations, including the government, state-owned enterprises, central enterprises and large-scale private enterprises, establish an exclusive digital office platform.
Investment suggestion: the company is a domestic SaaS leader in the field of office software. In the future, the transformation and layout ecology will fully enable the digital transformation of large-scale organization office, which is expected to further improve the growth ability of the company. It is estimated that the company’s net profit attributable to the parent company in 21 / 22 / 23 is RMB 1.042/14.52/2 billion, and the corresponding PE is 93x, 67x and 49x respectively. At present, the leaders in the field of A-share SaaS Yonyou Network Technology Co.Ltd(600588) , Glodon Company Limited(002410) , Beijing Shiji Information Technology Co.Ltd(002153) , under the unanimous expectation of wind, the PE in 22 years is 83 times. Considering the company’s potential market space, excellent business model and relatively reasonable valuation, the “recommended” rating is maintained.
Risk tip: the growth rate of users is lower than expected; The company’s b-end business development rhythm is lower than expected; The cultivation of user habits and payment habits may be affected by competitors.
