Kingsoft Office (688111) company research: domestic software carrier Anke and SAAS help spread wings

Kingsoft Office (688111) company research: domestic software carrier Anke and SAAS help spread wings
The flag bearers of domestic software have the strength to compete with overseas software giants.After 30 years of continuous development, Kingsoft Office ‘s main product, WPS Office, has sufficient competitive strength to compete directly with top overseas software giants.Current revenue sources include product authorization (B-side, G-side users), product subscriptions (C-side members), and advertising (free users).  C-side cloudization is trending, and the number of customers and ARPU value both increase.At 青岛夜网 the end of 2018, the number of WPS registered users was 2.8 billion, accounting for 42 of the total size of the domestic office market.75%.For individual SaaS users, WPS members (15 yuan / month) and rice hull members (20 yuan / month) are charged.Shareholders, the company optimized product services to attract individual users to subscribe, the number of WPS members increased from about 990,000 in 2016 to about 5.75 million in 2018, and the number of rice husk members increased from about 1.06 million in 2016 to about 20183.57 million people.At the same time, the overall ARPU showed an upward trend, rising from 26 yuan in 2016 to 48 yuan in 2018.Separately, the ARPU value of WPS members has gone from 27 in 2016.9 yuan increased to 56 in 2018.8 yuan; rice husk members ARPU value from 24 in 2016.3 yuan increased to 33 in 2018.北京桑拿8 yuan.  The development of the Encore industry is accelerating, and there is huge room for replacement at the G- and B-ends.The WPSOffice Linux version independently developed by the company has fully supported domestic complete machine platforms (such as Loongson, Feiteng, Zhaoxin, Shenwei and other chips) and domestic operating systems.WPS products and services are widely used in government, finance, energy, aviation and other important fields.The market share of state-owned enterprises, state-owned banks, and joint-stock banks averaged over 85%, and the market share of enterprises was 57.5%.  The BG side will release more than 6 billion space in the next five years, and the short-term revenue space of the C side may reach 2.8 billion.In the C-end field, through the sensitivity analysis of WPS member income and rice hull member income, we get that the annual income range of WPS members in the next five years is about 4.3 ppm-16.2 ppm, rice hull members’ annual income range for the next 5 years is about 2.5 ppm-11.700 million.That is, a conservative estimate of the annual subscription fee in the future can reach 6.With an annual income of 800 million U.S. dollars, optimistic estimates can reach 2.8 billion U.S. dollars in five years.In the field of alternatives, according to the calculation of 2000 million replacement computers as of 2022, government departments often use the method of site area authorization, assuming that the price of the WPS office for Linux is 960 yuan / 3 years / unit, that is 320 yuan / year /station.WPS’s involvement also includes the Yongzhong Office, which has a market share of over 95% and released 60.800 million market space.  A reasonable market value range is 61.4 billion?73.6 billion, giving a “buy” rating.With reference to U.S. stock Slack, it is expected to have revenue of $ 600 million in 2019, an estimated 18 billion, 30 times PS.In addition, the US stock cloud computing company’s PS in the period of rapid growth is usually 20-30 times.We expect Jinshan Office to achieve revenue in 202024.5.5 billion, a reasonable market value range of 61.4 billion?73.6 billion, corresponding to 25-30 times PS.  Risk warning: the risk of intensified market competition, the risk of single product and technology upgrade, and the risk of customer expansion less than expected.

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