单Q3 来看，公司实现营业收入12.14 亿元（YoY+10.53%），归母净利润3.18 亿元（YoY+8.33%），扣非归母净利润为3.03 亿元（YoY+6.66%）。Event Overview:
On October 25, Jinshan Office released the “Report for the Third Quarter of 2024”. The company achieved operating income of 3.627 billion yuan, an increase of 10.90% year on year; net profit due to mother was 1.04 billion yuan, up 16.41% year on year; net profit after deducted from mother was 0.991 billion yuan, up 15.16% year on year.
Q3 Performance grew steadily, and C-side subscriptions progressed steadily
Looking at Q3 alone, the company achieved operating income of 1.214 billion yuan (YoY +10.53%), net profit to mother 0.318 billion yuan (YoY +8.33%), and net profit after deducting non-attributable net profit of 0.303 billion yuan (YoY +6.66%).
By business, ① The revenue of the domestic personal office service subscription business in the third quarter was 0.762 billion yuan (YoY +17.24%). ② Domestic institutional subscription and service business of 0.248 billion yuan (YoY +0.02%). Relying on the more complete WPS 365, the company invigorates large-scale private enterprises and local state-owned enterprises in the public cloud market, and continues to increase the share of related revenue. ③ Domestic institutions authorized business revenue of 0.143 billion yuan (YoY +8.97%). The company fully laid out the sinking market in the field of party, government, and credit innovation, and the increase in related orders led to the growth of the business. ④ International and other business revenue of 60.75 million yuan (YoY -10.43%) is mainly due to the shutdown of domestic third-party commercial advertising business this year. The company's overseas business continues to grow rapidly.
As of September 30, 2024, the number of monthly active devices for the company's main products was 0.618 billion, an increase of 4.92% over the previous year. Among them, the number of monthly active devices on the PC version of WPS Office was 0.277 billion, up 6.95% year on year; the number of monthly active devices on the mobile version was 0.338 billion, up 3.36% year on year.
WPS AI continues to be updated, and AI Agent will accelerate the introduction of AI writing assistants, AI reading assistants, AI data assistants, and AI design assistants to WPS AI 2.0, an industry-side company, to provide users with a more convenient and efficient creative experience, strongly promote user stickiness and payment conversion, and drive steady growth in the domestic personal office service subscription business.
On October 10, WPS AI Companion Writing was officially launched. It supports writing based on reference materials, including documents, web pages, etc., limiting the scope of AI creation, and adding references to annotations with one click.
AI companion writing is the best practice of AI agents (agents) in the office field, and has obvious advantages in improving work efficiency and reducing costs. Unlike traditional big models, AI agents have the ability to think independently and call tools to gradually complete a given goal; however, the interaction between traditional big models and humans is based on prompts, and whether the user's prompt is clear and clear will affect the effectiveness of the big model's response. Recently, the overseas giant Microsoft announced the integration of 10 autonomous AI agents in Dynamics 365, which can help enterprises automate customer service, sales, finance, and warehousing operations with the support of the O1 model. We believe that the development of large models will accelerate the implementation of smart devices from concept to vertical industries and reshape the new paradigm of future offices.
Investment advice:
As a leading domestic office service software company, after launching WPS AI personal products last year, Jinshan Office is now releasing enterprise WPS AI products to the B-side market. In addition to empowering enterprise customers to improve the level of office intelligence, it will also explore and form new models and scenarios for domestic AI applications to be implemented on the B-side, which is of profound significance to the development of the entire AI industry. The company is expected to achieve operating income of 5.211/6.109/7.166 billion yuan and net profit of 1.556/1.915/2.337 billion yuan in 2024-2026. Maintaining a buy-A investment rating, a 6-month target price of 292.91 yuan is given, which is equivalent to 26 times PS in 2024.
Risk warning:
Core technology research and development fell short of expectations, product promotion and industrial ecosystem construction fell short of expectations, and the commercialization of WPS AI fell short of expectations.
