Jinwu Financial News | According to Open Source Securities Research, the 2024Q3 revenue of Jinshan Software (03888) office software business increased 12.5% year on year, and the number of monthly active users of the main products increased 4.9% year on year, and accelerated month over month. Among them, personal subscription business revenue increased 17.2% year over year. WPSAI 2.0 provided a more convenient creative experience, increased payment stickiness and paid conversion rate; institutional subscription revenue stopped falling flat year on year and increased 23.8% month on month. The bank estimates that the impact of the subscription model shift (annual billing to monthly billing) has decreased significantly, and the company is actively expanding In the state-owned enterprise and private enterprise market, contract debt continued to grow by 3.2%; revenue from authorized institutional business increased 9.0%/9.4% year over month, and the Xinchuang business showed some signs of recovery. Under the impetus of debt policies, localization trends, and Hongmeng Ecological Empowerment (WPS Hongmeng version began public beta in October), Xinchuang and the overall B-side business still have potential to grow in the future.
According to the bank, the new “Sword Net 3” documentary was launched at the end of October, and it is expected that the 2024Q4 game business will continue to grow rapidly year over year; in August, “Unblock” began public testing (the number of subscribers worldwide exceeds 3 million, the highest ranking on the Steam wish list), and the superposition of potential game reserves is expected to boost growth potential in 2025.
The bank said that, based on the company's game revenue growth continuing to exceed expectations, the B-side of office software showing signs of recovery, Jinshan Cloud benefiting from the Xiaomi ecosystem and AI-driven revenue acceleration, and the net loss amount is expected to narrow in the future, the bank raised its 2024-2026 net profit forecast from 12.28/14.12/18.02 to 1.796/2.052/2.45 billion yuan, with year-on-year growth rates of 271.5%/14.3%/19.4%, respectively, corresponding to the 2024-2026 diluted EPS of 1.34/1.54/1.83 yuan. The current stock price corresponds to 2024-2026 22.0/19.3/16.1 times PE. The 2024Q4 game business is still on the rise. The WPSC side maintains steady growth, AI+ Xinchuang+Hongmeng drives the B-side business recovery. Jinshan Cloud is expected to benefit from the Xiaomi ecosystem and AI drive to boost valuation and maintain a “buy” rating.
