\u3000\u3 Guocheng Mining Co.Ltd(000688) 111 Beijing Kingsoft Office Software Inc(688111) )
On March 23, 2022, the company released its annual report for 2021, which realized an operating revenue of 3.28 billion yuan in 2021, with a year-on-year increase of 45.07%; The net profit attributable to the parent company was 1.041 billion yuan, a year-on-year increase of 18.57%; Net profit deducted from non parent company was 840 million yuan, with a year-on-year increase of 37.32%.
For individual clients, the continuous improvement of product power has driven the steady growth of monthly activity, and the number of paying users has increased by 30% year-on-year. As of December 31, 2021, the number of monthly active equipment of the company’s main products was 544 million, an increase of 14.05% over the same period of last year and 4% over 2021q3; The cumulative number of annual paid individual users reached 25.37 million, a year-on-year increase of nearly 30%; The number of files uploaded on the cloud is about 130 billion, with a year-on-year increase of 45% and 9% compared with 2021q3. The growth of monthly activity and other data shows that the company’s product power is continuously improving. In 2021, China’s personal office service subscription business revenue was 1.465 billion yuan, an increase of 44% over the same period last year.
For institutional clients, the growth of Xinchuang business is high, and the institutional subscription business is expanding steadily. 1) At the government information and innovation end, the company not only better meets the domestic substitution needs of customers, but also has provided enabling services for digital government projects in Yunnan and other places by virtue of the collaborative response ability of the platform in the document, realizing the linkage between different businesses. 2) At the industry’s information and innovation end, the company has implemented the information and innovation cloud document project on a number of large bank projects, forming a connection with the OA products of the information and innovation platform. In 2021, the authorized business income of Chinese institutions was 962 million yuan, a year-on-year increase of 107%. In terms of China’s government and enterprise market, the company has won many major customers in the fields of government affairs, telecommunications, energy and finance. At the same time, it has vigorously expanded education, retail and other industries, and the institutional subscription business has been developing continuously. In 2021, China’s institutional subscription and service business revenue was 446 million yuan, an increase of 23% over the same period last year.
The draft of equity incentive has clear performance objectives and high contract liabilities, highlighting the growth potential. 1) The company issued the draft of equity incentive in 2022, involving a total of 127 incentive objects, including core managers and technical backbones; It is proposed to grant 1 million restricted shares to the incentive objects, accounting for 0.22% of the total share capital of the company. The company puts forward assessment objectives. Based on the performance in 2021, the growth rate of revenue in 2022 is not less than 15%, the growth rate of cumulative value of operating revenue in 20222023 is not less than 147%, and the growth rate of cumulative value of operating revenue in 20222024 is not less than 301%. According to this standard, the compound revenue growth rate of the company from 2021 to 2024 is about 15%.
2) at the same time, at the end of 2021, the company’s contract liabilities reached 1.421 billion yuan, an increase of 71% year-on-year and about 20% compared with 2021q3. Contract liabilities are an important indicator of SaaS’s growth ability. The high increase in contract liabilities indicates that the company’s business is still developing rapidly and its future growth potential is foreseeable.
Investment suggestion: the company is a domestic SaaS leader in the field of office software. In the future, it will fully enable the digital transformation of large-scale organizations, which is expected to further improve the company’s growth ability. It is estimated that the net profit attributable to the parent company in 22-24 years is RMB 1.453/1.938/2.551 billion, and the corresponding PE is 60x, 45x and 34x 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 average PE in 22 years is 79 times. Considering the potential market space and excellent business model of the company, 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
