\u3000\u3 Guocheng Mining Co.Ltd(000688) 111 Beijing Kingsoft Office Software Inc(688111) )
As the leader of office software in China, the company has the advantages of low-level technology and product power accumulated in 30 years. By seizing the opportunity of mobile Internet and surpassing Microsoft and other overseas giants on the mobile terminal, the leading position is gradually consolidated. SaaS transformation strategy meets the needs of comprehensive localization, improves the market environment and reshapes the secondary growth power.
Key points supporting rating
Overtaking at the mobile terminal to build the first brand of office software. By grasping the good opportunity of mobile Internet, the company reversed the old pattern of the industry and gained a leading position (customer coverage reached 62%, and the monthly living share of mobile terminal exceeded 90%). Mobile office is naturally friendly to SaaS subscription mode, which not only enhances the sustainability and smoothness of revenue, but also improves customer stickiness, which has become the main driving force for the company’s long-term growth.
Xinchuang and digital economy boost the market out of the street war. In the traditional market, users’ awareness of copyright and willingness to pay are low. The transformation from customer acquisition to payment and the complexity of competition are like “street warfare”. The industry has ushered in changes: (1) the certainty of localization has been strengthened. In 2023, Xinchuang market may exceed 365 billion yuan. Recent events such as Russia US sanctions have highlighted the urgency of scientific and technological autonomy; (2) Digital demand: according to the 14th five year plan, the scale of software and information service industry is expected to rapidly increase to 14 trillion yuan by 2025. During the epidemic, online office habits will also drive small and medium-sized enterprises and C-end market. The market gets rid of the street fighting environment, and the leading enterprises enter the comfort zone, which can achieve the expansion effect of point to face and long-distance drive.
Platform level strategy to deal with new battlefield. Facing the new environment of “positional warfare”, the company launched a new digital office platform, improved the layout from tool to service chain, and actively built its own office software ecosystem. While enjoying the company’s existing SaaS general products, customers can meet their personalized needs, which is conducive to improving their willingness to pay for digitalization. At the same time, the platform empowers the cloud manufacturer platform by means of module embedding, creates a digital transformation community with partners, and promotes ecological construction.
Valuation
It is estimated that the net profit from 2021 to 2023 will be 1.04, 1.47 and 2.02 billion yuan, and the EPS will be 226, 3.18 and 4.37 yuan. Comprehensive relative valuation (including PE / PS and segment valuation) and absolute valuation method, we believe that the reasonable market value is 88.2 ~ 120.5 billion yuan. The current market value is at the bottom of reasonable valuation, and there is 25% elastic space in the year. Tam valuation reflects that the long-term market value can reach 521.8 billion yuan, with a high ceiling. Maintain the overweight rating.
Main risks of rating
The growth of platform business is less than expected; Technological breakthrough is less than expected; The demand of Xinchuang fell
