\u3000\u3 Guocheng Mining Co.Ltd(000688) 111 Beijing Kingsoft Office Software Inc(688111) )
Event overview
1) on March 24, 2022, Beijing Kingsoft Office Software Inc(688111) released the annual report of 2021, realizing an annual operating revenue of 3.28 billion yuan, 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%; The net profit deducted from non parent company was 840 million yuan, with a year-on-year increase of 37.32%. The overall performance of the company was basically consistent with the express previously disclosed.
2) on the same day, Beijing Kingsoft Office Software Inc(688111) issued the 2022 restricted stock incentive plan (Draft), which plans to grant 1 million restricted shares to 127 core managers and technical backbones of the company, accounting for about 0.22% of the total share capital, and the grant price shall not be less than 45.86 yuan / share.
A number of measures continue to improve the stickiness of C-end users
The company’s personal subscription service has been continuously upgraded, with a cumulative annual payment of 25.37 million in 2021, a year-on-year increase of 30%. In terms of improving user stickiness, Beijing Kingsoft Office Software Inc(688111) has taken a number of measures: first, adjust the operation strategy, focus on annual members, increase the proportion of super members and constantly optimize the membership structure. By the end of the year, the company had more than 7 million members. The second is to improve the content quality. The new rice husk material library has been launched, the professional and authoritative high-quality library has been introduced, and the investment in maker posts has been increased. According to the company’s annual report, at present, the company has helped users store more than 130 billion documents on the public cloud. Third, innovate the business model, add personal and enterprise sales methods, enrich poster resources and business authorization, enhance the cloud office service experience and guide users to use the payment function in depth.
Digital office platform lays the foundation for b-end development
In 2021, Jinshan’s biggest move is to integrate its office product suite and underlying development capabilities, and release an open, enabled, safe and controllable digital office platform for customers. Digital office platform can not only promote big B customers from authorization to subscription, but also realize the transformation of the company’s business model; It can also meet the authorization needs of Xinchuang customers. In 2021, relying on the policy, the market space of Xinchuang was significantly expanded, the demand of government and enterprise users was significantly increased, and the orders of the company’s streaming office software products were rich, which accelerated the penetration of the company’s Xinchuang products and led to the rapid growth of China’s institutional licensing business. At present, the digital office platform has been successfully deployed in the traditional advantageous fields of government, finance, energy, medical education and other companies, laying the foundation for the continuous development of b-end business.
Equity incentive and continuous investment demonstrate the determination to lead
The performance target value of the new equity incentive assessment of the company in 2022 is that the compound growth rate of operating revenue from 2022 to 2024 is not less than 15%, and the trigger value is that the compound growth rate of operating revenue from 2022 to 2024 is not less than 10%. According to the company’s annual report, the company continued to increase investment in 2021. On the one hand, the R & D expenses increased rapidly, and the proportion of R & D personnel further increased to 66.94%, so as to meet the strong demand of customers for digital office platforms; On the other hand, it has also made reserves for salespeople, so as to provide more personal services for b-end customers. In addition, the company has established a nationwide service guarantee system, and is also committed to building a service ecosystem and introducing third-party partners to jointly improve the quality of customer service. At present, Beijing Kingsoft Office Software Inc(688111) has established five research and development centers, 12 service centers and hundreds of authorized service providers in China, which can respond to problems within 24 hours and arrive at the customer’s site within 48 hours. As the absolute leader of the industry, the company will continue to invest heavily in the future to lead the development of the industry.
Investment advice
Beijing Kingsoft Office Software Inc(688111) as a leading office service manufacturer in China, we expect the company to achieve an operating revenue of 4.103/53.44/6.867 billion yuan in 2022 / 23 / 24, with a year-on-year increase of 25.1% / 30.2% / 28.5%. The net profit attributable to the parent company was 1.353/18.04/2.310 billion yuan, with a year-on-year increase of 29.9% / 33.3% / 28%. Maintain the investment rating of Buy-A and give a six-month target price of 234.79 yuan, equivalent to 80 times the dynamic P / E ratio in 2022.
Risk warning: the research and development of core technology is not as expected; Product promotion and industrial ecological construction were not as expected.
