\u3000\u3 Guocheng Mining Co.Ltd(000688) 111 Beijing Kingsoft Office Software Inc(688111) )
The personal subscription business grew rapidly and the optimization of membership structure continued: in 2022q1, China’s personal office service subscription business realized a revenue of 426 million, a year-on-year increase of 36.72%. In Q1, the number of live devices increased significantly, and the number of effective members grew healthily. In 2022q1, the number of monthly active equipment of the company’s main products was 572 million, an increase of 14.86% over the same period of last year. Among them, the number of WPS office PC monthly active devices was 232 million, an increase of 17.17% over the same period of last year; The monthly number of active mobile devices was 336 million, an increase of 14.29% over the same period last year; The number of monthly active equipment of other products of the company, such as Kingsoft Ciba, is close to 5 million. It is expected that the company will continue to increase the proportion of users who pay at a low price in the long term, and the company’s main goal is to continue to increase the proportion of users who pay at a low price in the short term.
Institutional subscription and service business grew rapidly, and the digital office platform enabled head customers: in 2022q1, China’s institutional subscription and service business realized a revenue of 145 million, a year-on-year increase of 78.72%. The company’s institutional subscription revenue mainly comes from the contribution of government and enterprise head customers. The cloud document platform of Jinshan has significantly improved the office efficiency and security of enterprises. Therefore, the projects of large central enterprises and financial institutions are well implemented. At the same time, the company provides services, components and capabilities to help enterprises build their own digital office platform according to the needs of internal information privatization of large enterprises. With the continuous improvement of the quality of the company’s cloud and collaboration products and solutions, and the continuous refresh of the application experience of government and enterprise users in the field of “cloud and collaboration” on the office digital platform, the cloud process and penetration of customers are expected to further grow. We are optimistic about the development and performance of the company’s cloud document platform in the government and enterprise customer market in the future.
The revenue from institutional authorization business is under pressure in the short term, but it is good in the long term: in 2022q1, the revenue from institutional authorization business in China reached 232 million, a year-on-year decrease of 10.84%, mainly due to: (1) the high base revenue in the same period of last year; (2) The revenue is largely affected by the customer’s credit creation planning, and the market revenue of Party and government credit creation is higher than expected. In the future, with the support of policies, the market space of this market will be significantly expanded, the township market is determined to be stronger, there is still a gap in the demand of government and enterprise users, and the penetration rate of Party and government information and innovation products is expected to be further improved after the rhythm of policy promotion is clear. We are still optimistic about the long-term growth of the authorized business of the company’s institutions.
Profit forecast and investment rating: due to the impact of the promotion progress of Xinchuang, I maintain the forecast of net profit attributable to the parent company of RMB 1.377/18.03/2.323 billion from 2022 to 2024, and the corresponding PE of the current market value is 64 / 49 / 38 times respectively. We believe that the company, as the leader of China’s office software, has maintained rapid performance growth and “buy” rating this year due to multiple factors such as Xinchuang, online office acceleration and cloud collaboration.
Risk warning: the promotion of Xinchuang is not as expected; The growth of paying users is less than expected; The promotion of B / g end business is less than expected
