个人订阅业务稳健增长，机构订阅业务短期承压。分业务看，1）2024年三季度国内个人办公服务订阅业务实现收入7.62 亿元，同比增长17.24%，主要得益于公司WPS AI 2.0 持续进行功能升级迭代，不断提升用户创作体验，个人用户粘性和付费转化率进一步提升；2）三季度国内机构订阅及服务业务实现收入2.48 亿元，同比微增0.02%，我们认为主要是因为公司持续深化SaaS 化转型，三季度新增的中大型民企和地方国企客户采用订阅制的占比进一步提升，导致当期确认的收入有限。而截至今年9 月底公司合同负债金额同比增长16.30%，一定程度上反映B 端SaaS 化转型正顺利推进中；3）受益于下游信创相关订单增加，三季度国内机构授权业务实现收入1.43亿元，同比增长8.97%，业务增速明显改善；4）三季度国际及其他业务实现收入0.61 亿元，同比减少10.43%，主要是受2023 年底关停国内第三方商业广告业务影响。Description of the event
On October 25, the company released its 2024 three-quarter report. Among them, in the first three quarters of 2024, the company achieved revenue of 3.627 billion yuan, up 10.90% year on year; in the first three quarters, the company achieved net profit of 1.04 billion yuan, up 16.41% year on year, after deducting 0.991 billion yuan of non-net profit, up 15.16% year on year. In the third quarter of 2024, the company achieved revenue of 1.214 billion yuan, an increase of 10.53% year on year; in the third quarter, net profit to mother was 0.318 billion yuan, up 8.33% year on year, and realized deducted non-net profit of 0.303 billion yuan, an increase of 6.66% year on year.
Incident reviews
The personal subscription business is growing steadily, and the institutional subscription business is under pressure in the short term. By business, 1) In the third quarter of 2024, the domestic personal office service subscription business achieved revenue of 0.762 billion yuan, an increase of 17.24% over the previous year, mainly due to the company's WPS AI 2.0 continuous functional upgrades and iterations, continuously improving the user creation experience, and further improving individual user stickiness and payment conversion rates; 2) The domestic institutional subscription and service business achieved revenue of 0.248 billion yuan in the third quarter, a slight increase of 0.02% over the previous year. We think it was mainly because the company continued to deepen its SaaS transformation, with new additions added in the third quarter The share of medium and large private enterprises and local state-owned enterprise customers using the subscription system has further increased, resulting in limited revenue confirmed in the current period. By the end of September this year, the company's contract debt had increased 16.30% year on year, reflecting to a certain extent that B-side SaaS transformation was progressing smoothly; 3) benefiting from the increase in orders related to downstream credit innovation, domestic institutions achieved revenue of 0.143 billion yuan in the third quarter, up 8.97% year on year, and business growth rate improved markedly; 4) international and other businesses achieved revenue of 0.061 billion yuan in the third quarter, a decrease of 10.43% year on year, mainly due to the shutdown of domestic third-party commercial advertising services at the end of 2023.
Continued investment in product and technology research and development led to rapid growth in Q3 operating cash flow. The company's gross margin for the third quarter of 2024 was 85.47%, up 0.66 percentage points from the same period last year. On the cost side, the company's sales and management expenses rate in the third quarter decreased by 1.53 and 4.14 percentage points, respectively, compared to the same period last year, while the R&D expenses rate increased 4.73 percentage points over the same period last year. The company's R&D investment reached 0.454 billion yuan, an increase of 26.54% over the previous year. We think it was mainly due to the company's continued increase in AI and collaborative work.
In addition, the company's net operating cash flow for the third quarter was 0.451 billion yuan, up 31.20% year on year, and higher than the net profit growth rate, indicating an improvement in the quality of the company's operations.
Investment advice
As a domestic office software leader, while the personal subscription business continues to grow, the WPS AI commercialization process is expected to accelerate, but considering the short-term pressure on institutional subscription business revenue due to the SaaS transformation, the company's 2024-2026 EPS is expected to be 3.22\ 3.96\ 4.88, respectively, corresponding to the company's closing price of 258.58 yuan on October 30, and PE of 80.30\ 65.35\ 52.96 in 2024-2026 respectively, maintaining a “buy-A” rating.
Risk warning
Product iterations fall short of expectations, macro-environmental risks, and market competition exacerbate risks.
