\u3000\u3 Guocheng Mining Co.Ltd(000688) 111 Beijing Kingsoft Office Software Inc(688111) )
Core view
In 2021, the revenue maintained a rapid growth and the performance of contract liabilities was excellent. In 2021, the company realized a revenue of 3.280 billion yuan (+ 45.07%), a net profit attributable to the parent company of 1.041 billion yuan (+ 18.57%), and a net profit not attributable to the parent company of 840 million yuan (+ 37.32%). In Q4 alone, the company achieved revenue of 908 million yuan (+ 19.79%), net profit attributable to parent company of 193 million yuan (- 31.64%), net profit not attributable to parent company of 138 million yuan (- 36.66%). The net operating cash flow of the company reached 1.864 billion yuan (+ 23.10%), and the contract liabilities reached 1.421 billion yuan (+ 70.59%).
Xinchuang drives the high growth of authorization, and the monthly and quarterly growth rate stabilizes and rebounds. In terms of business, China’s personal subscription business achieved an operating revenue of about 1.465 billion yuan (+ 44.2%); With the improvement of cloud, China’s institutional subscription and service business realized an operating revenue of about 446 million yuan (+ 23.4%); Driven by Xinchuang, the authorized business of Chinese institutions achieved an operating revenue of about 962 million yuan (+ 107.1%); The revenue of Internet advertising business was 406 million yuan (- 3.01%). By the end of the 21st century, the number of monthly living equipment of the company’s main products was 544 million, with a year-on-year increase of 14.05%; Among them, wpspc version has a monthly life of 219 million (+ 15.87%), and mobile version has a monthly life of 321 million (+ 13.83%). In terms of quarterly growth rate, the growth rate of total monthly activity and PC monthly activity in 21q4 rebounded, with a total monthly activity growth rate of 4.41% (Q3: 3.99%), PC monthly activity growth rate of 6.31% (Q3: 3.52%), and mobile growth rate decreased to 3.22% (Q3: 5.07%). The company’s cumulative number of paying users reached 25.37 million, a year-on-year increase of 29.31%; The payment conversion rate reached 4.66%, which was further improved compared with 4.14% last year; ARPU value reached 57.75 yuan, a certain increase over 56.52 yuan last year; The cumulative number of annual super members exceeds 7 million.
Thirdly, equity incentive is bound to the core team. In this incentive, it is proposed to grant 1 million restricted shares (accounting for 0.22% of the current share capital) to the incentive objects, and the grant price shall not be less than 45.86 yuan / share. There are 127 incentive objects involved in the first grant (accounting for 3% of the total number of current employees). The performance assessment objectives are divided into two levels. Based on the revenue of 21 years, the compound growth rate of revenue in 22-24 years is more than 10%, which can reach 90% of the first level; If the revenue growth rate in 22-24 years reaches 15% 15% 16%, it can reach the second 100% ownership.
Risk tip: the growth of Xinchuang market slows down; The development of collaborative business is less than expected.
Investment advice: maintain the “buy” rating.
It is estimated that the operating revenue from 2022 to 2024 will be RMB 4.375/57.88/7.595 billion, with growth rates of 33% / 32% / 31% respectively, and the net profit attributable to the parent company will be RMB 1.384/18.50/2.417 billion, corresponding to 63 / 47 / 36 times of the current PE, maintaining the “buy” rating.
