\u3000\u3000 Beijing Kingsoft Office Software Inc(688111) (688111)
The number of users continues to increase, broaden the moat of the company and lay the foundation for long-term development. The company's market share in the field of office software in China has been increasing, and the number of users has maintained a high growth. As of 21q3, the company's WPS desktop Mau has reached 206 million and WPS mobile Mau has reached 311 million; With the company actively expanding user groups, the company's core competitiveness is expected to continue to improve and its market share will continue to expand, laying a good foundation for the company's long-term development.
Mobile and cloud strategies improve WPS market competitiveness, and more cost-effective products are close to the needs of Chinese users. WPS takes the lead in vigorously distributing mobile end products and takes the mobile end as the traffic entrance to realize the coordinated growth of users of WPS mobile end and WPS desktop end products; Relying on Jinshan cloud, the company actively promotes the cloud strategy, has more data security than overseas enterprises, and is expected to open the company's second growth curve. In addition, the company has a rich product matrix, which is closer to the diversified needs of Chinese users, and has a good cost performance advantage.
Domestic substitution logic creates a favorable development window for the company, and government and enterprise procurement accelerates the penetration process of WPS. In the context of domestic substitution, the government supports the development of local software enterprises through policies, funds and other means. At the same time, with the continuous improvement of the performance of the company's products, the recognition of Chinese users for the company's products is also increasing, and the company continues to benefit under the promotion of multiple benefits. On the other hand, government and enterprise procurement has also accelerated the penetration process of WPS in the Chinese market, and the market share has been rapidly improved, which will help the company accelerate its development and provide a strong guarantee for the company's future performance.
Profit forecast and investment rating: under the background of domestic substitution, domestic software has ushered in a development window period. At the same time, with the improvement of national copyright awareness and payment ability, China National Software And Service Company Limited(600536) enterprise's profitability has been further improved. The company actively promotes technological innovation and product innovation, pays close attention to the general trend of office software mobility and cloud, and maintains rapid development in the future. It is estimated that the net profit attributable to the parent company from 2021 to 2023 will be 1.125 billion yuan, 1.548 billion yuan and 2.124 billion yuan respectively, corresponding to 109.83 times, 79.78 times and 58.14 times of PE. It will be covered for the first time and rated as "overweight".
Risk factors: 1. The growth of users is less than expected; 2. Core technology leakage or technological innovation is less than expected; 3. The development of the industry is less than expected.
