\u3000\u3 Guocheng Mining Co.Ltd(000688) 111 Beijing Kingsoft Office Software Inc(688111) )
Event: on March 23, 2022, the company released its annual report for 2021. During the reporting period, the company realized an operating revenue of 3.28 billion, a year-on-year increase of 45.07%; The net profit attributable to the parent company was 1.041 billion, with a year-on-year increase of 18.57%; The net profit deducted from non parent company was 841 million, with a year-on-year increase of 37.47%. In terms of business, personal subscription business achieved a revenue of 1.465 billion, a year-on-year increase of 44.20%; Institutional subscription and service business realized a revenue of 446 million, a year-on-year increase of 23.40%; The revenue from institutional authorization business was 962 million, a year-on-year increase of 107.10%; Internet advertising promotion services and other businesses realized a revenue of 406 million, a year-on-year decrease of 3.01%.
Comments:
The performance is in line with expectations, and the high growth rate comes from personal office service subscription business and institutional authorization business. The growth rate of the company's net profit is lower than that of revenue, mainly due to the high non recurring profits and losses such as financial income last year, and the company is in the critical period of turning to cloud, and the R & D investment also remains high. However, although the profit is under pressure in the short term due to the business transformation platform period, the company has good long-term growth under the cloud trend, and the R & D investment is expected to remain stable with the maturity of technical products in the future, so it is still optimistic about the long-term development of the company. In terms of business: 1) personal subscription business: in 2021, the cumulative number of paying users increased to 25.37 million, with a year-on-year increase of 29.31%. The growth of paying users led to a high increase in personal subscription business revenue. In the context of the normalization of the epidemic situation, the "cloud office and collaborative office" model has been rapidly popularized, so that the demand for cloud based collaboration and sharing has been continuously stimulated. The company promotes the cloud of users and continuously improves the stickiness of cloud collaborative office of individual and enterprise users; 2) In terms of institutional authorization business: the industry's information and innovation industry has entered the development period. Driven by the dual engine of policy guidance and industry demand, the industry's information and innovation penetration rate has been increasing. During the year, a number of pilot projects have been opened in key areas represented by financial information and innovation to promote the development of information and innovation industry. The company has also obtained the unanimous recognition of customers such as the first bank, the two sessions, exchanges, banks and securities companies. The demand growth of government and enterprise users has accelerated the penetration of the company's information and innovation products, Drive the authorized business of Chinese institutions to continue to maintain explosive growth. Looking forward to next year, the company's contract liabilities will be about 1.4 billion yuan by the end of 2021, with a year-on-year increase of 70.62%. The performance certainty in 2022 is still high.
The trend of cloud collaboration and digital transformation remains unchanged, and a growth take-off platform is built. 1) In terms of individual users, in the post epidemic era, the growth rate of users and paying users has slowed down, but customers' cloud office and cloud collaboration habits are being formed. In the future, with the continuous improvement of the added value of the company's products and services, there is still room for personal subscription business after passing the platform period. In 2021, the monthly life of the company's main products was 544 million, a year-on-year increase of 14.05%, but the cumulative number of users was only 25.37 million, and there is still room for penetration; 2) In terms of government and enterprise business, benefiting from the implementation of Xinchuang, the company's government and enterprise business, especially the authorization business, has increased significantly, highlighting the company's market recognition and leading position. The mode of "cloud office and collaborative office" will continue to deepen in the future. According to iResearch consulting report, the scale of collaborative office market is expected to increase from 50 billion yuan in 2021 to 80.6 billion yuan in 2023, with a compound annual growth rate of more than 20%. Moreover, the company has obvious demand for digital transformation of downstream customers. The company has continued to connect with China Southern Power Grid, China Mobile, China United Network Communications Limited(600050) , Bank Of Communications Co.Ltd(601328) , China Merchants Bank Co.Ltd(600036) , Taikang Insurance Due to the digital transformation needs of dozens of large enterprise customers such as GM Group, the company, as the leader of cloud office, is expected to grasp the cloud trend opportunity in the office field.
The company's profit forecast and investment rating: the company has vigorously expanded the industry's information and innovation market, and customer cases have continued to land. Firm cloud strategic direction remains unchanged, and high R & D investment casts the foundation for medium and long-term output. We estimate that the net profit of the company from 2022 to 2024 will be 1.306 billion yuan, 1.605 billion yuan and 1.956 billion yuan respectively, and the corresponding EPS will be 2.83, 3.48 and 4.24 yuan respectively. The current share price corresponds to PE values of 68, 55 and 45 times from 2022 to 2024 respectively. The current valuation level is moderate and maintains the "strongly recommended" rating.
