\u3000\u3 Guocheng Mining Co.Ltd(000688) 111 Beijing Kingsoft Office Software Inc(688111) )
Event: on March 24, Beijing Kingsoft Office Software Inc(688111) released the annual report of 2021. In 2021, the company achieved 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, with a year-on-year increase of 18.57%, and the deduction of non net profit was 840 million yuan, with a year-on-year increase of 37.32%.
The gross profit margin continued to remain high, and the rate of various expenses changed little. In 2021, the company achieved a revenue of 3.28 billion yuan, with a year-on-year increase of 45.07%, mainly due to the continuous and rapid growth of China’s personal office service subscription business, the continuous and stable growth of China’s institutional subscription business and the explosive growth of China’s institutional authorization business. In 2021, the company’s overall gross profit margin was 86.91%, down 0.79 percentage points from 2019, and the overall gross profit margin continued to remain high; The sales expense rate, management expense rate, R & D expense rate and financial expense rate were 21.2%, 9.9%, 33% and – 0.52% respectively, with changes of – 0.2%, 0.5, 1.6 and – 0.1 percentage points respectively compared with 20 years.
Personal subscription business is growing rapidly, and monthly living devices and paying users continue to increase. The company’s personal office service subscription business continues to focus on the transformation from tools to services, strengthen product functions and improve user experience through internal development and external cooperation. In 2021, China’s personal office service subscription business revenue reached 1.465 billion yuan, an increase of 44.20% over the same period last year. In addition, the company has overcome the difficulties of natural decline in traffic and fierce market competition after the epidemic, and promoted the number of monthly living equipment to break through the peak level of the epidemic. By the end of 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. At the same time, on the basis of the stable growth of the monthly number of active devices of main products, the company promotes the cloud of users, improves the use of payment functions and promotes the continuous increase of the number of paying people by continuously optimizing the function experience. As of December 31, 2021, the company has accumulated 25.37 million annual paid individual users. A year-on-year increase of 26.31%.
The credit innovation industry has made great efforts to drive the explosive growth of institutional authorization business. In 2021, China’s information technology and innovation industry entered the development period. With the support of policies, the market space expanded significantly, and the demand of government and enterprise users increased significantly. The company’s streaming office software products have huge orders, which has accelerated the penetration of the company’s Xinchuang products and driven the explosive growth of China’s institutional licensing business. In 2021, the company realized a revenue of 962.45 million yuan from authorized business of Chinese institutions, an increase of 107.10% over the same period of last year. In addition, Beijing Kingsoft Office Software Inc(688111) as the representative of the application software field in the core industrial chain of Xinchuang, has adapted the company’s products to the products of Qilin, Tongxin, Feiteng, Longxin, Zhaoxin, haiguang, Kunpeng and other Xinchuang system, covering many fields and forming a complete solution. In 2021, the company realized a revenue of 446.26 million yuan from China’s institutional subscription and service business, an increase of 23.40% over the same period of last year.
Investment suggestion: we estimate that the company’s operating revenue from 2022 to 2024 will be 4.526 billion yuan, 6.011 billion yuan and 7.636 billion yuan respectively, the net profit attributable to the parent company will be 1.446 billion yuan, 1.960 billion yuan and 2.587 billion yuan respectively, and the EPS will be 3.14, 4.25 and 5.61 yuan respectively. Maintain the “buy” rating.
Risk tip: the growth of users is less than expected; Technological innovation is less than expected; Strategic change is less than expected; Macroeconomic downturn.
