\u3000\u3 Guocheng Mining Co.Ltd(000688) 111 Beijing Kingsoft Office Software Inc(688111) )
Key investment points
Investment events: the company released its 2021 annual report: (1) the revenue was 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%; Net profit deducted from non parent company was 840 million yuan, with a year-on-year increase of 37.32%. (2) Profit distribution plan: 10 Pai 7.
High growth of multiple business lines and good performance growth of the company. During the reporting period, affected by the company’s adjustment of member operation mode, the growth of demand for information innovation and other factors, the company’s multiple business lines achieved rapid growth, including the revenue of China’s personal office service subscription business of 1.465 billion yuan, a year-on-year increase of 44.20%; China’s institutional subscription and service revenue was 446 million yuan, a year-on-year increase of 23.40%; The authorized business income of Chinese institutions reached 962 million yuan, a year-on-year increase of 107.10%, doubling the growth; In order to optimize the user experience, the company adjusted the advertising business operation strategy, and the income from Internet advertising and other businesses was 406 million yuan, a year-on-year decrease of 3.01%. Driven by the high growth of subscription, authorization and other businesses, the overall performance of the company maintained high growth, with revenue growth of 45.07% and net profit growth of 18.57%.
The subscription mode has been promoted rapidly, and the performance of business indicators is beautiful. The number of monthly active devices of the company’s main products maintained a stable growth, with 544 million monthly active devices, a year-on-year increase of 14.05%, including 219 million wpsofficepc version, a year-on-year increase of 15.87%; The mobile version was 321 million, a year-on-year increase of 13.83%. Based on the high base and stable growth of monthly active devices, the company continues to optimize the experience, promote the cloud of users, optimize the experience of payment mode, increase the number of paying members, and accelerate the development of individual and enterprise subscription business. By the end of 2021, the cumulative number of annual paid individual users of the company had reached 25.37 million, a year-on-year increase of 29.31%; The cumulative number of annual super members exceeds 7 million; The number of files that the company helps users store on the public cloud is about 130 billion; The subscription income of Chinese individuals and enterprises reached 1.465 billion yuan and 446 million yuan respectively, with growth rates of 44.20% and 23.40% respectively. The subscription mode of the company has been implemented rapidly, and the membership scale, online document scale, revenue scale and other business indicators are beautiful.
Increase investment in R & D and continuously enrich the product system. During the reporting period, the company continued to increase R & D investment, and continuously carried out product upgrading and R & D of new products and technologies for WPS client, Jinshan documents, collaborative office services and other aspects. By the end of 2021, the company had 2811 R & D personnel, an increase of 933 over the same period of last year; In 2021, the company invested 1.082 billion yuan in R & D, with a year-on-year increase of 52.12%. At the end of 2021, the company officially released Jinshan digital office platform to meet the needs of digital office transformation of enterprise customers. The company continues to build a rich product system to enhance product competitiveness.
Investment suggestion: due to the impact of factors such as the implementation progress of Xinchuang business and the adjustment of the company’s product operation mode, we adjusted the company’s profit forecast. Before the adjustment, we expect the company’s revenue to be 4.991/6.6 billion yuan and net profit to be 1.744/2.289 billion yuan respectively in 2022 / 2023 / 2024. After the adjustment, we expect the revenue to be 4.302/57.46/7.564 billion yuan and net profit to be 1.384/18.29/2.397 billion yuan respectively in 2022 / 2023 and PE to be 61.6/46.6/35.6 times respectively, giving a “buy” rating.
Risk tip: the development of subscription mode is less than expected, and the growth of office software licensing business slows down
