\u3000\u3 Guocheng Mining Co.Ltd(000688) 111 Beijing Kingsoft Office Software Inc(688111) )
Event: on March 23, the company released its annual report for 2021, achieving a revenue of 3.28 billion yuan, 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%; Deduct 840 million yuan of non parent net profit, with a year-on-year increase of 37.32%; Net operating cash flow was 1.864 billion yuan, a year-on-year increase of 23.10%.
The business structure has been continuously optimized, with subscription and service revenue accounting for nearly 60%. In 2021, China’s personal subscription / institutional subscription / institutional authorization / Internet advertising and other revenue accounted for 44.7% / 13.6% / 29.3% / 12.4% respectively, and China’s total personal and institutional subscription revenue accounted for 58%, a significant increase compared with 2017 (23%). In terms of business: 1) China’s individual subscription revenue was 1.465 billion yuan, with a year-on-year increase of 44.20%, which was mainly due to: ① the base of individual users continued to expand, with 544 million monthly active users in 2021, with a year-on-year increase of 14.05%, and 310 / 411 / 477 million monthly active users in 20182020; ② The high-quality content platform promoted the transformation of users to long-term payment. In 2021, the cumulative number of annual paying users was 25.37 million, a year-on-year increase of 29.31%, and the cumulative number of annual paying users from 2018 to 2020 was 588 / 1202 / 19.62 million. 2) China’s institutional subscription revenue was 446 million yuan, a year-on-year increase of 23.40%. The company accelerated the transformation from traditional independent office to cloud and collaborative office. By the end of 2021, the number of registered enterprises in the public cloud market of the company had exceeded one million. At the end of 2021, the company launched Jinshan digital office platform for super large organizations, and released three new products: Jinshan collaboration, light dimension table and Jinshan knowledge base, which is expected to further improve the cloud degree of government and enterprises. 3) The authorized revenue of Chinese institutions was 962 million yuan, a year-on-year increase of 107.10%. China’s information technology innovation industry has entered a vigorous period, the party and government information innovation and industry information innovation have been continuously promoted, the demand of government and enterprise users has increased significantly, and the company’s streaming office software products have huge orders. 4) Internet advertising business and other revenue reached 406 million yuan, a year-on-year decrease of 3.01%, mainly because the company continued to maintain a strategic adjustment attitude in Internet advertising business, and the proportion of this part of revenue continued to shrink steadily.
R & D investment continued to increase, contract liabilities remained high, and growth continued. In 2021, the company invested 1.082 billion yuan in R & D, a year-on-year increase of 52.15%; The number of R & D personnel was 2811, with a year-on-year increase of 49.68%, accounting for 67%; At the same time, the R & D expense rate remains above 30%, which shows that the company attaches great importance to R & D. At the end of the reporting period, the company’s total contractual liabilities amounted to 1.421 billion yuan, with a year-on-year increase of 70.62%, mainly due to the growth of personal office service subscription business in China, which not only confirmed the prosperity of the industry, but also laid a solid foundation for high growth in the future.
Profit forecast: taking into account the revenue growth brought by the company’s cloud promotion and the power of information innovation, the company raised its revenue forecast for 22-23 years to 4.351/5.799 billion yuan (the original value of 22-23 years was 4.341 and 5.749 billion yuan, with an increase of 0.23% and 0.87%), and the new revenue forecast for 24 years was 7.657 billion yuan; Considering the continuous high R & D investment of the company, the forecast of the net profit attributable to the parent company for 22-23 years was lowered to 1.384/1.84 billion yuan (the original value was 1.576 billion yuan and 2.081 billion yuan, with a decrease of 12.2% and 11.6%), and the forecast of the net profit attributable to the parent company for 24 years was increased to 2.416 billion yuan; The EPS of 22-24 years is 3.00/3.99/5.24 yuan respectively, and the corresponding PE is 64x / 48x / 37x respectively.
Risk tip: the number of individual paying users is less than expected, and the promotion of Xinchuang is less than expected.
