\u3000\u3 Guocheng Mining Co.Ltd(000688) 111 Beijing Kingsoft Office Software Inc(688111) )
Event: the company released its annual report for 2021. During the reporting period, the company achieved a business income 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%; RMB 840 million will be returned to the parent company after deducting non restricted shares, with a year-on-year increase of 37.32%, which is in line with the expectation. In addition, the company issued the restricted stock incentive plan for 2022 (Draft), which plans to grant 1 million restricted shares to the incentive object at a price of no less than 45.86% yuan / share.
The b-end information innovation drive is strong, and the cloud and collaborative office mode is advancing steadily. The authorized business income of Chinese institutions was 962 million yuan, a year-on-year increase of 107.10%. The information innovation industry has entered the development period, the demand of government and enterprise users has increased significantly, and the orders of the company’s streaming office software products are rich, which has accelerated the penetration of the company’s information innovation products and driven the business to maintain explosive growth. In the future, the sinking of Party and government information innovation, the in-depth development of e-government and industry information innovation are expected to continue to drive growth. At the same time, with the gradual deepening of user cloud, China’s institutional subscription and service business maintained a stable growth, with a revenue of 446 million yuan in 2021, a year-on-year increase of 23.40%, laying a foundation for the company’s subsequent promotion of digital office platform.
The C-end user base has been steadily expanded, ARPU has been significantly improved, and the growth potential of subscription business is considerable. In 2021, China’s personal office service subscription business revenue was 146500 yuan, a year-on-year increase of 44.20%; By the end of 2021, the number of monthly active devices of the company’s main products was 544 million, with a year-on-year increase of 14.05%. The cumulative number of annual paid individual users reached 25.37 million. ARPU increased significantly year-on-year, which also shows the effectiveness of the company in promoting the transformation of long-term member sales strategy. By the end of 2021, the balance of contract liabilities of the company was RMB 1.421 billion, an increase of 70.65% over the beginning of the period, and continued to increase by RMB 226 million over the end of the third quarter of 21, realizing a significant recovery in the growth rate during the year, suggesting the sustainability of the growth of subscription business.
Investment suggestion: we predict that the net profit attributable to the parent company from 2022 to 2024 will be RMB 1.368 billion, RMB 1.824 billion and RMB 2.405 billion, with PE of 61, 46 and 35x, maintaining the “buy” rating of the company.
Risk warning: the development and demand of Xinchuang are less than expected; B-end subscription conversion is not as expected; The growth of C-end paying users is lower than expected; Market competition in the field of collaborative office has intensified.
