\u3000\u3 Guocheng Mining Co.Ltd(000688) 111 Beijing Kingsoft Office Software Inc(688111) )
Core view
Event: the company released the 22q1 quarterly report, realizing an income of 868 million (+ 12.3%), a net profit attributable to the parent of 251 million (- 18.4%), a deduction of 201 million (- 21.8%), and a total contract liability of more than 1.8 billion.
The subscription business has maintained rapid growth, especially the institutional subscription business. During the reporting period, the company’s personal office service subscription business in China achieved a revenue of 426 million, a year-on-year increase of 36.7%, continuing rapid growth. China’s institutional subscription and service business realized a revenue of 145 million, a year-on-year increase of 78.7%, and achieved rapid growth, mainly due to the promotion of the company’s cloud and collaboration products and solutions. The revenue from authorized business of Chinese institutions reached 232 million, a year-on-year decrease of 10.8%, which was mainly due to the high base in the same period of last year and the unclear specific promotion rhythm in the field of information and innovation in the current period. In addition, the company continued to optimize the user experience, and the Internet advertising business continued to shrink.
The operation data of personal office service subscription business continued to perform well. By the end of the reporting period, the monthly active equipment of the company’s main products was 572 million, with a year-on-year increase of 14.9% and a month on month increase of 5.1%. Among them, the monthly living of the core PC version increased by 17.2% year-on-year to 232 million, which continued to be higher than the overall monthly living growth; The number of mobile monthly live devices increased by 14.3% year-on-year to 336 million. The continuous and rapid growth of PC end monthly activity and the continuous transformation of user attributes to the long-term are expected to continue to support the continuous and rapid growth of the company’s personal office services.
Institutional subscription service business is expected to become the second growth curve of the company. Collaboration has become the company’s fifth largest development strategy. Last year, the company launched a digital office platform supported by documents and collaboration, which has greatly improved the richness and overall solution ability of organization oriented collaborative office products. The improvement of the product end will lay a solid foundation for the development of the company’s institutional subscription business. It is expected to continue to improve the cloud process and collaboration efficiency of government and enterprises, and provide good support for the growth of the company’s overall revenue.
Profit forecast and investment suggestions
We maintain the company’s EPS of 2.94/3.87/5.14 yuan for 22-24 years, and maintain the company’s PE of 74 times for 22 years, with the corresponding target price of 217.56 yuan. We maintain the overweight rating
Risk tips
The risk that localization substitution is less than expected;
The risk that the conversion rate of payment is lower than expected;
